WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that he filed a notice of appeal in Purdue Pharma’s flawed bankruptcy plan. He asserted that the plan is inadequate, and that a bankruptcy court does not have the authority to prevent attorneys general from enforcing state law, including the decision to pursue the company’s owners, members of the Sackler family, for their illegal conduct.
“Purdue Pharma and the Sacklers misled physicians, pharmacists, patients, and the public,” said AG Racine. “They shouldn’t be allowed to walk away with billions in profits they made by exacerbating the opioid crisis that has destroyed families and communities across the District and the country. The court should reconsider this plan. It’s up to states to decide whether and how to hold bad actors, like the Sacklers, accountable.”
Purdue Pharma’s bankruptcy plan, approved today by U.S. Bankruptcy Judge Robert Drain, includes a lifetime legal shield for members of the Sackler family, none of whom have filed or met the requirements for bankruptcy, which denies states the power to pursue their own actions under state law against the Sackler family in the future.
An audit of Purdue Pharma introduced during the bankruptcy proceedings in late 2019 showed that the Sackler family has pulled nearly $11 billion out of Purdue since legal action against the company and the family began in 2008.
The District was one of 48 states that sued Purdue Pharma, the maker of OxyContin, for fueling the opioid epidemic. The lawsuits assert Purdue embarked on a massive deceptive marketing campaign to convince doctors and the public that OxyContin is safe and effective for treating chronic pain and has a low risk of addiction, all without evidence to support its claims. As a result, the company got more people to take these addictive drugs and increased its profits. The District and many other states also sued members of the Sackler family, owners of Purdue Pharma, for their personal involvement in this deception campaign.
In October 2019, Purdue Pharma declared bankruptcy, and then obtained an injunction halting all state legal actions against the company and the Sacklers. As part of the bankruptcy proceedings, Purdue Pharma had to draft a plan that, once approved by the judge, governs how the company will pay back all its creditors — including the 48 state attorneys general that filed suit. This plan, objected to by the District, but approved by the bankruptcy court today, includes releases of the Sackler family in addition to the company.
OAG’s Efforts to Address the Opioid Crisis
This effort is the latest development in OAG’s efforts to address the national opioid crisis and protect District residents from harm. Earlier this year, OAG and a multi-state coalition reached a $573 million settlement with McKinsey & Company for its role in helping opioid manufacturers promote and profit off dangerously addictive painkillers. The District will receive $1.08 million through this settlement for local efforts to address the harms caused by opioids.
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 2019, OAG sued Purdue Pharma and former top executive Richard Sackler for misleading patients, doctors, and communities about the danger of opioids in pursuit of massive profits from sales. Last summer, AG Racine led a 10-state coalition supporting states’ rights to enact policies geared towards opioid overdose prevention.