The settlement is the first to emerge from the more than 1,600 opioid lawsuits Purdue faces from states, cities and counties. The municipalities claim aggressive marketing of prescription painkillers by Purdue and other pharmaceutical companies helped trigger widespread drug addiction that has saddled the communities with significant financial burdens.
The deal in Oklahoma could set a floor for the amount other states will seek in their lawsuits against Purdue. It could also influence active settlement talks in the federal multidistrict litigation involving Purdue and other companies in the drug-supply chain.
“It’s got to set off a feeding frenzy,” said Elizabeth Burch, a law professor at the University of Georgia. “There’s blood in the water now.”
The maker of OxyContin and its billionaire owners have been under intense pressure as lawsuits have mounted. Purdue has said it is exploring bankruptcy, a move that could allow it to resolve the claims on a global basis. It has produced millions of pages of documents for plaintiffs’ lawyers, and the U.S. House Oversight Committee on March 21 asked Purdue to turn over documents related to Sackler family members and their role in the company’s marketing.
Oklahoma—one of 37 states to sue Purdue since 2017—has become a focal point of the opioid litigation nationwide because its case has the earliest scheduled trial date, on May 28. The next major trial is slated for the fall, in the cases of two Ohio counties that are part of the consolidation of hundreds of opioid lawsuits filed in federal court in Cleveland.
The Oklahoma settlement includes $102.5 million from Purdue to fund an addiction and treatment center at Oklahoma State University and $20 million in medicine to support the center, the person familiar with the matter said. Purdue will also pay $12.5 million to be distributed to local cities and counties and up to $60 million to cover litigation costs, with any balance going back to the center, the person said.
Descendants of company founders Mortimer and Raymond Sackler have pledged an additional $75 million over five years to the addiction center, which will be supported by an advisory board of experts in academia, medicine, law enforcement and treatment.
In court filings, Oklahoma blames Purdue and other drugmakers for helping spark an eightfold rise in drug overdose deaths from 1999 to 2012. The state had 823 fatal drug overdoses in 2015, it said in its June 2017 lawsuit. The state said it leads the nation in nonmedical use of painkillers, with nearly 5% of those aged 12 and above abusing or misusing the drugs.
Purdue and other drugmaker defendants in the Oklahoma case had pushed a judge to delay the trial, arguing that they’ve been stymied by the state in obtaining the documents and interviews they require to defend themselves. State court Judge Thad Balkman earlier this month denied the request, saying he didn’t care that the trial was the first in the nation but that “the wheels of justice...will continue to turn, unimpeded.”
The Oklahoma Supreme Court said Monday it wouldn’t take up an appeal of the judge’s decision.
Judge Balkman had earlier said he would allow cameras in the courtroom to televise the trial, a move the defendants argued would encourage theatrics and lengthen the proceedings.
The settlement doesn’t immediately impact the trial moving forward against the other drugmakers targeted by Oklahoma: Johnson & Johnson and Teva Pharmaceuticals.
Oklahoma Attorney General Mike Hunter and a team of private lawyers he hired to work on the case have aggressively pushed the lawsuit forward since its filing less than two years ago.
Texas-based attorneys from the law firm Nix Patterson representing the attorney general have been sleeping on cots in their Oklahoma office in recent weeks to keep the trial preparations moving around the clock.
The settlement means two Sackler family members who had been scheduled to be deposed in the case won’t be called to testify. Other Sacklers are being deposed in the federal multidistrict litigation. Family members have become more involved in settlement talks in that litigation, The Wall Street Journal has reported.
The Sackler family acquired a small pharmaceutical company in 1952 selling laxatives, earwax remover and arthritis treatment that later became Purdue Pharma. The company brought its signature drug, OxyContin, to the U.S. market in 1996.
Purdue faced a federal investigation in 2007 that led it and three of its executives to plead guilty to criminal charges of misleading the public about the addiction risk related to the drug and to pay $634.5 million in government penalties and costs.