Opioid Crisis Settlement Raises Legal and Moral Questions (Insurance Journal)

Opioid Crisis Settlement Raises Legal and Moral Questions

  Monday, November 27th, 2023 Source: Insurance Journal

The proposed settlement in the Purdue Pharma case, involving the makers of OxyContin, is a complex mix of legal and moral dilemmas. The Sackler family, owners of Purdue Pharma, would relinquish control and contribute up to $6 billion for opioid crisis mitigation in exchange for immunity from civil lawsuits. However, they could retain a significant portion of OxyContin profits. The Supreme Court is set to review this aspect of the bankruptcy resolution, focusing on the legality of extending bankruptcy protection to non-bankrupt third parties like the Sacklers. This legal issue, with varying lower court opinions, has broader implications for product liability lawsuits resolved through bankruptcy.

Victims’ responses to the settlement are divided. Some, like Ellen Isaacs and Lynn Wencus, who lost loved ones to opioid overdose, have contrasting views on whether the deal brings closure or perpetuates injustice. Purdue Pharma’s role in the opioid epidemic, starting with OxyContin in 1996, is significant, though it’s not the only contributor. The company’s 2007 guilty plea and subsequent fines highlight its misleading marketing practices.

The larger context includes over $50 billion in settlements from drug companies to address the epidemic. Purdue Pharma’s settlement, one of the largest, includes a direct compensation pool for victims. The Sacklers’ low profile and ceased payouts from Purdue since its bankruptcy contrast with their previous decade’s earnings of over $10 billion. Their insistence on lawsuit immunity as part of the settlement has been controversial.

The U.S. Bankruptcy Trustee and Attorney General Merrick Garland oppose the legal protections for the Sacklers. The settlement’s approval could set a precedent for third-party releases in bankruptcy cases, previously seen in asbestos, Boy Scouts of America, and Catholic diocese cases. The decision could have significant implications for the legal handling of large-scale liability cases and the balance between victim compensation and perpetrator accountability.

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