WASHINGTON, D.C. – Attorney General Karl A. Racine today announced the District and eight other states reached a landmark settlement agreement that requires the Sackler family to pay a total of up to $6 billion – an additional $1.7 billion more than the initial agreement – to resolve the family’s and Purdue Pharma’s liability for creating, exacerbating, and profiting from the opioid crisis with the addictive painkiller, OxyContin.
In total, the District will now receive over $31 million from the Sacklers and Purdue Pharma. The funds will be used to help victims of opioid abuse and provide needed support and treatment. As a result of AG Racine’s efforts to hold those accountable for the opioid crisis, the Office of the Attorney General (OAG) has secured a total of nearly $80 million across several settlements, including today’s announcement, that will be used to help District residents struggling with opioid abuse and addiction.
“Today, we are holding the Sacklers and Purdue Pharma financially accountable for the central role they had in creating and profiting from the opioid epidemic that has taken the lives of more than a million Americans—fathers, daughters, mothers, sons, family members, and friends. Hundreds of thousands more continue to suffer from the ravages of addiction. No one, no matter how big or powerful, will get away with taking advantage of the health and safety of District residents,” said AG Racine. “We joined other states in reopening the initial settlement that, frankly, was inadequate. My team and I led the negotiations and helped secure additional funds for the District of Columbia, bringing our total to $31 million – nearly four times the amount we would have received under the initial deal. Most importantly, all of these much-needed funds will go toward helping address the opioid crisis and supporting victims struggling with opioid abuse and addiction. In DC, we continue to see the harsh impacts of this crisis on vulnerable residents, especially Black residents. Sadly, we can’t bring back those who lost their lives because of these addictive and dangerous drugs, but these funds, if used effectively, will help save lives.”
In 2019, OAG for the District of Columbia, along with attorneys general for most other states, filed lawsuits against Purdue Pharma and the Sacklers for their role in creating and exacerbating the opioid epidemic. That same year, Purdue Pharma filed for bankruptcy. In September 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan.
But nine states, including the District of Columbia, appealed the adoption of that agreement by the bankruptcy court because the deal did not require the Sacklers to pay enough money for their egregious actions promoting and profiting from the opioid epidemic. The nine states won in federal court in December which reopened negotiations. Purdue appealed the ruling. But, as a result of that court decision, the nine states – spearheaded in part by AG Racine who was a lead in-person negotiator during mediation – worked to get the Sacklers to pay an additional $1.7 billion for their role in the opioid crisis. The initial agreement required the Sackler family and Purdue to pay $4.35 billion. Following the additional negotiations by the District and eight other states, the Sacklers will now pay a total of $6 billion.
As a result of AG Racine’s negotiating and the work of the eight other states, the District will receive substantially more funds from the Sacklers that will be used to support opioid victims. From the initial settlement agreement, the District would have received $8.3 million. But after the additional negotiations, the District will now receive an additional $23.1 million, bringing its total to $31.4 million.
In addition to requiring the Sackler family to pay $6 billion to the states, the nine states also secured additional important concessions from the Sacklers and Purdue:
- The Sackler family must apologize for their role in the opioid epidemic, and allow institutions to remove the Sackler name from buildings and scholarships;
- The Sackler family must participate in a public hearing where victims and their survivors would be given an opportunity to directly address the family;
- Purdue Pharma must disclose and make public millions of additional records previously withheld as privileged legal advice, on top of those required to be made public under the initial bankruptcy plan; and
- Purdue Pharma must be dissolved or sold by 2024 and the Sacklers are banned from the opioid business, which were included in the initial Purdue bankruptcy plan.
In the immediate term, this additional money and this new agreement must be approved by the bankruptcy court in a process that will play out over the next couple of weeks. The actual payments will not be made until the pending appeal of the bankruptcy plan concludes and the current plan moves forward. The federal government is continuing to challenge the legitimacy of the bankruptcy plan and could pursue any appeal to the Supreme Court.
OAG has prioritized going after pharmaceutical companies, opioid distributors, and consulting firms that furthered and profited from the opioid epidemic. As a result of OAG’s efforts, it has secured a total of $79.9 million, including today’s announcement, for the District that will be used to support District residents struggling with opioid abuse and addiction. Just last week, AG Racine announced the District will receive $47 million from settlements with opioid manufacturer, Johnson & Johnson, and the three major pharmaceutical distributors, McKesson, AmerisourceBergen, and Cardinal. And in February 2021, AG Racine announced the District will receive $1.08 million from a settlement with McKinsey & Company, one of the world’s largest consulting firms, which helped Purdue Pharma promote and profit off dangerously addictive painkillers.
The ongoing opioid epidemic has exploded across the U.S. and the District in recent years. In 2020 alone, drug overdoses took the lives of over 81,000 Americans. According to a recent report from the National Center for Health Statistics, nearly one million people died in the United States from overdoses between 1999 and 2020. The District had the fourth highest opioid overdose rate in 2019. Fatal opioid overdoses increased by 46% from 2019 to 2020, and they disproportionately impacted Black residents who accounted for 84% of overdose fatalities in the last six years.
Judge Shelley C. Chapman of the U.S. Bankruptcy Court in New York served as the mediator and led the successful negotiations that resulted in the increased concessions from Purdue and the Sacklers.
A copy of the settlement is available here.
OAG’s Additional Efforts to Address the Opioid Crisis
This settlement is the latest development in the OAG’s efforts to address the national opioid crisis and protect District residents from harm. In 2016, AG Racine testified on the Substance Abuse and Opioid Overdose Prevention Amendment Act. In 2018, the DC Council passed a permanent version of the Synthetics Abatement and Full Enforcement Drug Control Act (Safe DC) proposed by AG Racine to make it easier to prosecute the suppliers and distributors of dangerous drugs, including the synthetic opioid fentanyl.
In July 2020, AG Racine led a 10-state coalition supporting states’ rights to enact policies geared towards opioid overdose prevention. In April 2021, AG Racine was a part of a $300 million multi-state settlement agreement with the pharmaceutical manufacturer Indivior, over Medicaid fraud allegations and the false marketing of Suboxone, which is approved for use by those recovering from opioid use disorder to avoid or reduce withdrawal symptoms.