More than 70 attorneys showed up at a federal courthouse in White Plains, New York, on Tuesday for the first hearing in Purdue Pharma’s bankruptcy court proceedings.
The pharmaceutical giant and maker of the painkiller Oxycontin filed for bankruptcy as part of its plan to settle the litigation brought by more than 2,000 counties, municipalities and Native American governments who say the company fueled the opioid crisis.
Purdue Pharma continues to manufacture OxyContin, said Joe Rice, co-lead counsel for the plaintiffs in the multi-district litigation.
“OxyContin is going to be available in this country,” he told CNN after the hearing. “This is not a case that people are going to stop the sale of OxyContin. What we want to do is stop the inappropriate use and the abuse. But people in end of life pain, people with immediate surgical needs, are going to be able to get the medicine they need.”
CNN has reached out to representatives at Purdue for additional information regarding the manufacturing of OxyContin.
But during the hearing earlier Tuesday, lead corporate and restructuring counsel to Purdue Pharma Marshall Huebner said “all promoting of OxyContin and other opioid medications to prescribers to Purdue ceased no later than 20 months ago, in February 2018.”
“At that time, Purdue began the process of eliminating its opioid medications sales force,” Huebner said.
‘Largest and most complex case in American history’
Paul Hanly Jr., co-lead counsel for the multi-district litigation against opioid manufacturers, described it as the “largest and most complex case in American history.”
He said the sheer number of defendants, the differences among them and the number of plaintiffs all contribute to its complexity, along with “the huge amounts of money that are potentially needed to solve the opioid epidemic. And there are different estimates of that.”
“They range from $75 billion a year to $500 billion a year. So really, we are talking about potentially a case that, the value of which is approaching a trillion dollars, although no one expects that these companies would have the kind of money to fund that size of a settlement,” Hanly said.
Although Purdue is working to settle with some of the plaintiffs in the multi-district litigation, trials will still be taking place because there are many other manufacturers and distributors who are defendants.
Acting in the interest of the American public
Huebner said during the hearing that the entirety of the debtors — consisting of 24 entities that include Purdue Pharma L.P. — will be transferred to a trust, or other suitable post-emergence structure, that will be administered by independent directors acting for the benefit of claimants “and thus, ultimately the American public.”
“Lest there by any confusion, let me be clear. The entirety of Purdue means just that,” Huebner said. “Your honor, 100% of Purdue’s assets — including its sizeable cash position of more than $1 billion, all of its products, revenues, contract rights, intellectual property, insurance proceeds, as well as its accumulated expertise, knowledge, and manufacturing capability.”
No member of the Sackler family — the billionaire family that owns the company — is currently on Purdue Pharma’s board or is currently employed by the company, Huebner reiterated Tuesday. The last Sackler family resignation was eight months ago, the attorney said.
Other Purdue Pharma attorneys noted during the hearing that none of the money still owed to Sackler employees — like sign-on bonuses and severance pay — would go to any member of the Sackler family.
Tuesday’s hearing — lasting over 3 1/2 hours — is just the first in what will be a protracted, complex and unprecedented settlement procedure.
Support for settlement framework
Purdue estimates after bankruptcy filings are complete, it will provide more than $10 billion in funding to address the opioid crisis. That will include settlements with 24 state attorneys general, five US territories and attorneys in the multi-district litigation, the company previously said in a statement.
“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” a statement from the chairman of Purdue’s board of directors Steve Miller said.
The key group of plaintiffs that have agreed to support the settlement framework include 24 state attorneys general and analogous officials of all five permanently-inhabited territories or commonwealths, including Puerto Rico. Purdue previously settled with Oklahoma and Kentucky.
The settlement framework came after months of “intense, arduous, careful, and complex negotiations” with relevant stakeholders, Huebner said.
CORRECTION: A previous version of this article misspelled the last name of attorney Paul Hanly Jr.