OxyContin maker Purdue Pharma and a group of states have not been able to agree on a multibillion-dollar settlement of lawsuits over the drug's role in the opioid crisis after more than a month of mediation.
A mediator could call for still more talks between the parties, Purdue lawyer Marshall Huebner said at a hearing Thursday, indicating there could be a call for further mediation.
At the hearing, conducted by video conference from his White Plains, New York, courtroom, U.S. Bankruptcy Judge Robert Drain extended until March 3 legal protections for the company and its owners that had been set to expire Thursday to allow more time for a deal.
“This case is too significant to too many people and governmental entities and other parties of interest to be making knee-jerk reactions in light of a process that is still unfolding,” Drain said.
Stamford, Connecticut-based Purdue and members of the Sackler family who own it have been cast as villains in the opioid overdose and addiction crisis that has claimed the lives of more than 500,000 Americans over the past two decades.
While OxyContin is among the best-known prescription opioids, state, local and Native American governments have been suing — and in many cases, settling with — many other companies that make or distribute drugs over the toll of opioids.
With lawsuits over Purdue's role mounting, the company filed for bankruptcy protection in 2019. Last year, lawyers for local governments and most states agreed to a deal to settle all the claims against the company.
Members of the Sackler family would give up ownership of the company, which would become a new entity with profits dedicated to fighting the drug crisis. Family members would also contribute $4.5 billion in cash and charitable assets. In exchange, family members would also be shielded from civil lawsuits over the toll of opioids.
Most attorneys general agreed to the deal, which would have required that most of the money be used to fight the opioid crisis, sent $750 million to individual victims or their survivors, and made public millions of company documents.
But the attorneys general for eight states and the District of Columbia refused to sign on, contending the deal didn't do enough to hold the Sacklers accountable. And after the bankruptcy judge approved the deal, those holdouts prevailed on appeal, persuading another judge last December to reject the settlement by ruling that bankruptcy courts could not provide legal protections to parties not in bankruptcy if others objected.
That ruling prompted a new round of mediation with hundreds of hours of meetings in person, by phone and Zoom, to try to reach a deal between the company and the holdout attorneys general representing California, Connecticut, Delaware, the District of Columbia, Maryland, Oregon, Rhode Island, Vermont and Washington state.
In reports filed Jan. 31 and Feb. 8, the mediator, U.S. Bankruptcy Judge Shelley Chapman, said a deal including more money from Sackler family members was close. Drain gave the parties a deadline of Wednesday to reach an agreement.
They didn't get there, at least not as of late morning Thursday.
Huebner, the Purdue lawyer, told Drain that he expected Chapman to file a new report by Friday. Other parties have not commented.
In the meantime, a group of seven Democratic U.S. senators this week sent a letter to the U.S. Department of Justice to call for criminal charges against Sackler family members to be considered.
——— This story has been corrected to show that the bankruptcy judge's last name is Drain, not Sackler.