Colorado would receive at least $50 million from a proposed multibillion dollar deal with Purdue Pharma and the family that owns the company to settle thousands of lawsuits over the bankrupt pharmaceutical giant’s alleged role in the opioid crisis.
The deal comes after Colorado and 14 other states late Wednesday agreed to drop their opposition to a bankruptcy plan filed by Purdue Pharma, the maker of the powerful prescription painkiller OxyContin.
In exchange for the states’ support of the plan, Purdue Pharma agreed to release tens millions of documents outlining its operations. The Sackler family, which owned and operated the company during the height of the opioid crisis, would also separate from the company and be permanently barred from the opioid business, according to the Colorado Attorney General’s Office.
Under the plan, Purdue Pharma would be sold or wound down by the end of 2024. The settlement money would be paid out to Colorado over nine years, the attorney general’s office said.
“Purdue Pharma and the Sackler family made billions of dollars from engaging in a widespread, multifaceted, deceptive and wrongful campaign to market and sell opioids,” Colorado Attorney General Phil Weiser said in a written statement. “Their actions have contributed greatly to a crisis level of opioid use disorder cases and nearly 5,000 overdose deaths in Colorado. Today, we are holding Purdue and the Sacklers accountable for their reprehensible conduct and the crisis they caused in our state and around the country.”
Weiser’s office says the exact amount Colorado will receive as part of the settlement will be determined as part of bankruptcy proceedings still pending in federal court. The $50 million will come from the Sackler family alone, meaning the sum will rise — possibly by a significant factor — once Purdue Pharma’s share is factored in.
Colorado sued Purdue Pharma in September 2018 in a case that launched by Republican former Attorney General Cynthia Coffman. After Weiser, a Democrat, took office in January 2019, he expanded the legal action to include members of the Sackler family and company executives.
Purdue Pharma filed for bankruptcy in September 2019, proposing a multibillion dollar payout to settle lawsuits against the company. But Weiser was among the attorneys general who objected to the proposal, saying it was too small.
“This is not a sufficient amount and doesn’t do justice to what I believe the harm requires us to obtain,” Weiser said in an interview with The Colorado Sun at the time.
The new settlement, which totals at least $4.3 billion from the Sackler family, must be approved by Robert Drain, the federal judge overseeing the bankruptcy case.
Some states still oppose the bankruptcy agreement, but the deal announced Thursday makes it more likely Drain will confirm the settlement.
In a statement, members of the Sackler family called the support of more states “an important step toward providing substantial resources for people and communities in need.”
Purdue Pharma said in a statement that it will try to build “even greater consensus” for its plan.
Purdue Pharma sought bankruptcy protection in 2019 as a way to settle about 3,000 lawsuits it faced from state and local governments and other entities. They claimed the company’s continued marketing of its powerful prescription painkiller contributed to a crisis that has been linked to nearly 500,000 deaths in the U.S. over the last two decades.
A court filing on Wednesday outlining the deal came from a mediator appointed by the bankruptcy court and shows that members of the wealthy Sackler family who own Purdue Pharma agreed to increase their cash contribution to the settlement by $50 million. They also will allow $175 million held in Sackler family charities to go toward abating the crisis.
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Colorado’s lawsuit alleged that Purdue Pharma sales representatives methodically pursued, encouraged and manipulated doctors to set aside their concerns about addiction and to prescribe higher doses of the powerful painkiller. By 2006, according to notes cited in the lawsuit, Purdue Pharma sales reps were encouraging doctors to prescribe higher and higher doses of OxyContin to compensate for doctors’ observations that standard doses did not last the 12 hours the company claimed they would.
Last year, Purdue Pharma pleaded guilty to federal criminal charges and agreed to pay $225 million to the federal government.
Weiser said that “funds we receive from this resolution will be shared with local governments in our state to support recovery, treatment and education and prevention programs.”
The Associated Press contributed to this report.