Attorney General Tong forces Purdue Pharma and the Sackler family to pay $6 billion to victims, survivors and states
(Hartford, CT) – Attorney General William Tong announced today that Purdue Pharma and the Sackler family will pay $6 billion to victims, survivors and states for their role in the opioid epidemic, or 40% more than the settlement previously overturned on appeal by Connecticut.
As part of the agreement, the Sackler family must apologize and allow institutions to remove the Sackler name from buildings and fellowships. Connecticut will receive approximately $95 million from the settlement which will be used to fund opioid treatment and prevention. The agreement authorizes Connecticut to use a portion of the settlement funds to establish an Opioid Survivor Trust to directly help survivors and victims of the opioid epidemic.
The settlement leaves intact the provisions of Purdue’s bankruptcy plan requiring the company to be dissolved or sold by 2024 and barring the Sacklers from trading opioids in the United States and around the world. The original bankruptcy plan required Purdue and the Sacklers to release more than 30 million documents. The settlement announced today compels the disclosure of additional documents previously withheld as privileged legal advice.
Today’s announcement is a civil settlement. Neither this agreement nor the prior bankruptcy plan relieves the Sacklers of any potential future criminal liability.
Today’s settlement is the product of a court-ordered mediation, which began Jan. 3 under the direction of Judge Shelley C. Chapman. The mediation was extended three times by the bankruptcy court and included dozens of in-person and telephone negotiation sessions.
Highlights of the settlement include:
• The Sackler families must pay the states $6 billion, or $1.675 billion and nearly 40% more than the original bankruptcy plan. The final payments are spread over 18 years, with larger payments coming up early so the state gets more money, sooner than in the previous bankruptcy plan.
• The Sackler families are to apologize for their role in the opioid epidemic and to the victims whose lives have been devastated.
• The Sackler family must allow institutions to remove the family name from buildings, fellowships, and fellowships.
• Responding to Connecticut’s request, Mediator Judge Shelley C. Chapman urged the bankruptcy court to require the Sacklers to participate in a public hearing where victims and their survivors would have the opportunity to speak directly to the family.
• Purdue is to release additional documents previously withheld as privileged legal advice, including legal advice regarding advocacy before Congress, the promotion, sale and distribution of Purdue opioids, the structure of Purdue’s compliance department, and its abuse monitoring and deterrence systems, and records regarding recommendations from McKinsey & Company, Razorfish, and Publicis regarding the sale and marketing of opioids.
• The settlement is conditioned on the bankruptcy court’s approval, the Second Circuit’s rescission of the district court’s order and the completion of the bankruptcy plan.
“Five months ago, Connecticut said no to a Purdue bankruptcy plan that allowed the Sackler family to buy lifetime legal immunity without even apologizing. After months of negotiations and consultations with the victims and their families, Connecticut forced Purdue Pharma and the Sacklers to pay a $6 billion settlement and apologize in dollars, words and deeds. Connecticut will use its $95 million share to save lives through opioid treatment and prevention, and I will push to establish a Connecticut Opioid Survivors Trust to provide direct relief to victims and their families. But this fight was never about money. After years of lies and denial, the Sackler family must now directly apologize for the pain they have caused. They must come face to face with the survivors of their reckless greed in a public hearing. Museums and universities can now erase Sackler’s tarnished name from their walls, ensuring that this family will be remembered throughout history for their callous disregard for human suffering and nothing else.” said Attorney General Tong. “This settlement is both important and insufficient, limited by the inadequacies of our federal bankruptcy code. But Connecticut cannot block this process indefinitely while the victims and our sister states wait for a resolution. This settlement resolves our claims against Purdue and the Sacklers, but we are not done fighting for justice against the drug industry and against our broken bankruptcy code.
Connecticut filed an initial lawsuit against Purdue and individual members of the Sackler family in 2018, alleging the company and family peddled a series of lies to drive patients to its opioids, reaping huge profits while addiction to opioids was skyrocketing. Connecticut expanded and amended that lawsuit in 2019 to add additional defendants and allegations, including the fraudulent transfer of hundreds of millions of dollars from Purdue Pharma to the Sacklers to shield their wealth from liability.
Purdue Pharma filed for bankruptcy in September 2019. In 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan that granted a lifetime legal shield to the Sackler family, illegally preventing states like Connecticut from pursuing claims against the family. The plan required the Sackler family to pay $4.3 billion over nine years to states, municipalities and plaintiffs who sued the company. California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia opposed and ultimately appealed the plan. The United States Trustee, an arm of the Department of Justice, also appealed.
In December 2021, the United States District Court overturned Purdue’s bankruptcy order, agreeing with non-consenting states that the bankruptcy court had no power to force states to waive their claims. against the Sackler family. Purdue has appealed to the United States Court of Appeals for the Second Circuit, and that appeal will continue. If the case lands in the U.S. Supreme Court, Connecticut reserves the right to continue its fight against non-debtor non-consensual releases.
Attorney General Tong testified last year before the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law in support of bankruptcy law reforms that would prohibit non-bankrupt individuals and businesses from exploiting loopholes in the bankruptcy code to escape liability.
Tackling the addiction industry
In the past year alone, Connecticut led negotiations that will provide $32.5 billion in new funding nationwide to address the opioid epidemic, including approximately $400 million for Connecticut alone. . In addition to the latest Purdue settlement, two major settlements reached in the past year include:
• Distributors: Pharmaceutical distributors Cardinal, McKesson and AmerisourceBergen and manufacturer Johnson & Johnson have enabled the flood of deadly addictive painkillers into our communities. They will pay $26 billion, including about $300 million to Connecticut over the next 18 years to fund treatment, prevention and recovery programs. It is the second largest multi-state cash settlement in history, second only to the historic tobacco settlement.
• McKinsey & Company: The consulting giant will pay $573 million, including $7.5 million to Connecticut, over the next five years for its role advising Purdue Pharma in fueling the opioid epidemic.
Attorney General Tong and Governor Ned Lamont have urged the Connecticut General Assembly to approve legislation ensuring that Connecticut’s funding from these historic settlements is spent on evidence-based strategies to save lives and combat the opioid epidemic.
Special Attorney for Opioids Matthew Fitzsimmons, Solicitor General Clare Kindall, Assistant Associate Attorney General Jeremy Pearlman, Assistant Attorneys General Sara Nadim, Ann-Marie DeGraffenreidt, John Wright and Alma Nunley, Legal Investigator Caylee Ribeiro, Paralegal Specialists Lynn Rioux, Samantha Klein, and Cheryl Turner, Administrative Assistant Melissa Gordon, former Special Counsel for Opioids Judge Kimberly Massicotte, and retired Assistant Attorney General Eleanor Mullin are assisting or have previously assisted the Attorney General in this case.