Purdue Pharma — the manufacturer of Oxycontin, the prescription painkiller that critics say was the catalyst for the nation’s opioid epidemic — made its first appearance in federal bankruptcy court Tuesday, as the company attempts to settle a tsunami of lawsuits brought by governments across the country.
About half the states want to accept a settlement offered by the company, but New Jersey is not one of them, as Attorney General Gurbir Grewal is pushing hard for stiffer penalties against the owners of the company, the Sackler family.
“A settlement that doesn’t hurt them in their pocketbooks, doesn’t claw back the proceeds and doesn’t fund treatment is unacceptable to me and should be unacceptable to every New Jerseyan,” he said during an extended interview with NJTV News.
Grewal is one of 25 state attorneys general who reject outright the proposed settlement, which totals a reported $10- to $12 billion, saying that it doesn’t come close to compensating for the damage done in New Jersey and elsewhere. Critics allege Purdue Pharma made billions pushing Oxycontin as a supposedly less addictive painkiller, and fueling a national opioid epidemic that killed 400,000 in the United States over two decades. More than 8,000 have died of opioid-related drug overdoses in New Jersey since 2012.
Facing thousands of lawsuits, the privately-owned company opted for bankruptcy. According to reports, its settlement offer would place the company in a trust that would provide as much as $8 billion from ongoing sales of its products and $1.5 billion would come from the sale of another family owned company, Mundipharma. The family members would contribute $3 billion from their personal assets.
“The Sacklers are not paying their share here,” Grewal said. “They took billions from that company. And we want to take those ill-gotten proceeds and bring them back and use them for treatment.”
Grewal also said he didn’t believe the $3 billion was actually coming from the family’s personal assets. “Is the money that they’re putting up actually coming from their pockets? It’s not. They’re bankrupting a company, selling that asset, and trying to fund a settlement. And so that’s not acceptable to me.”
‘A byzantine network’
In addition to being a party to the bankruptcy proceeding taking place in federal court in White Plains, New York, New Jersey in May filed a separate lawsuit against eight members of the Sackler family.
Grewal said investigators from various jurisdictions were sharing resources to get a better understanding of the family’s assets, a fortune estimated by Forbes at $13 billion. Late last week, according to news reports, the attorney general’s office in New York said it had uncovered roughly $1 billion in wire transfers by the family, some through Swiss bank accounts.
“It’s a byzantine network of companies and they have foreign partnerships,” Grewal said. “But their big asset overseas is Mundipharma. And we know what they do, and we have a sense of how much money is available there. But let’s also remember this: they stripped this company to its bones.”
Grewal said he was bound by confidentiality agreements and could not say how much money would go to New Jersey under the existing proposal. He also declined to divulge how much he thinks the state should get.
When asked why New Jersey was not settling for the money offered and instead undertaking what promised to be a protracted effort to unravel the family’s finances, Grewal cautioned that the proposed settlement is far from a done deal.
“The thing that people have to remember here is that this settlement that’s being talked about, that’s not an immediate payment. That’s over a number of years as well,” he said. “So the Sacklers are not offering to put up a substantial amount right now.”
Settlement lacks admission of guilt
Grewal said New Jersey was willing to follow the trail as long as it takes.
“Whether it takes us seven years in bankruptcy, or five years, we’re willing to do that to hold them accountable,” he said.
Through their attorney, the Sacklers have expressed “deep compassion for the victims of the opioid crisis” and say they believe the settlement framework “is an historic step toward providing critical resources that address a tragic public health situation.”
The proposed settlement does not include an admission of guilt. Grewal said that’s a non-starter for him.
“I want them to admit — as we know from their documents — that they knew these drugs were highly addictive and dangerous. They lied about it. And they lied about it to line their own pockets with billions of dollars. I want them to give those billions back, and I want them to help the people who are suffering in New Jersey — the 3,000-plus families who were affected last year, the thousands more that’ll be affected this year, those are just the deaths. The Narcan saves, and folks who are locked in this cycle of overdose, Narcan save, arrest. They created that. I want them to admit that. And I want them to fund treatment,” he said.
The bankruptcy judge sitting on the case will establish the rules for moving forward in what promises to be a monumental legal battle that could go on for years.