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Supreme Court blocks opioid settlement with Purdue Pharma that shielded Sacklers

AYESHA RASCOE, HOST:

The U.S. Supreme Court released a bunch of big opinions last week. One of the most consequential lands at the heart of America's deadly opioid crisis, which is still killing more than 70,000 people in the U.S. every year. Justices tossed out a bankruptcy deal valued at more than $7 billion involving Purdue Pharma - maker of OxyContin - and the company's owners - members of the Sackler family. NPR addiction correspondent Brian Mann and Aneri Pattani with KFF Health News have been following this complex case and join us now.

BRIAN MANN, BYLINE: Good morning.

ANERI PATTANI, BYLINE: Hello.

RASCOE: The justices focused on one question. Can members of the Sackler family get immunity from opioid lawsuits from a bankruptcy court without filing for bankruptcy themselves? And a slim 5-4 majority gave us their answer.

MANN: Yeah, that's right. And the justices said no. This majority opinion written by Justice Neil Gorsuch found the bankruptcy court exceeded its authority creating this complex deal. It would have forced people to give up their civil lawsuits against the Sacklers. Here's Melissa Jacoby, an expert on bankruptcy law at the University of North Carolina.

MELISSA JACOBY: The court is doing a reset here and saying there is no authority to protect the Sacklers, who are not bankruptcy filers themselves, at least against claimants who have not agreed to settle with them.

PATTANI: So basically, she's saying that the Sacklers can't get immunity because they're not filing for bankruptcy. Only their company is.

MANN: Yeah, Aneri, that's right. And in his opinion, Gorsuch also nods at the terrible harm caused by the prescription opioid crisis and by this one company, Purdue Pharma, in particular. Remember, guys, hundreds of thousands of people have died from overdoses. A lot of public health experts say members of the Sackler family, who led this company, played a big role in that.

RASCOE: So what happens next in the case?

PATTANI: Well, it goes back to bankruptcy court. I mean, the Sackler family has said - they put out a statement saying, you know, we're open to negotiating again. And that means they're going to have to work with states, victims, their families, all the various groups to come up with a new deal. And the thing is, Ayesha, last time, it took them about three years to negotiate a deal. So some advocates I spoke with are really anxious to get this next round started. Here's Ryan Hampton. He's an activist who's in recovery from addiction to OxyContin.

RYAN HAMPTON: I think everybody wants this done in an expeditious way. It is important to get to the table and negotiate something that puts victims first very quickly.

MANN: And one thing to remember is that while these talks are happening again, the Sacklers could face a wave of civil lawsuits since they don't have immunity now. Those suits could add pressure for them to reach a new deal, and they could wind up paying a lot more money.

RASCOE: So let's talk about the money. Roughly 7 to $8 billion was on the table here. Will the loss or delay of this money affect other opioid settlement money from different corporations?

PATTANI: That's a question I've been hearing a lot, but no. This case is actually separate from other opioid settlements that have already been finalized and many of which are already paying out. So companies like Johnson and Johnson, CVS, Walmart - they've agreed to nearly $50 billion in settlement, and some of that money is already in the hands of state and local governments.

RASCOE: OK, so some of the money is out there. Do we know if that money is starting to help?

PATTANI: That's a trickier question. There's a lot of debate around how this money is spent. Some of it is being used to build new addiction rehab centers and recovery houses, but some of it is being spent on more controversial efforts like buying new squad cars and equipment for police.

MANN: And, Ayesha, one thing that I think we should point out is that a group that is directly affected by this week's ruling - this Purdue Pharma deal had set aside $750 million to go directly to victims and families. That's something those other corporate settlements didn't do. So there are a lot of people who are expecting money from this deal, who have been harmed by OxyContin, who are going to have to wait.

RASCOE: This ruling goes beyond the opioid crisis, though. Like, why does the precedent in the Sackler case matter?

PATTANI: Well, it's 'cause the Sacklers and what they're doing isn't that unique. We've seen over the last decade a lot of wealthy companies, individuals and even nonprofits, in some cases, creating similar bankruptcy schemes, where they want to get legal protections without actually going bankrupt first.

MANN: And because the Supreme Court said no here to the Sackler Purdue Pharma bankruptcy maneuver, legal experts say it's going to make it a lot harder for other wealthy players, other corporations especially, to effectively game the bankruptcy system.

RASCOE: That's NPR's Brian Mann. We also heard from Aneri Pattani with KFF Health News. Thank you so much.

MANN: Thank you.

PATTANI: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Brian Mann
Brian Mann is NPR's first national addiction correspondent. He also covers breaking news in the U.S. and around the world.
Aneri Pattani
Ayesha Rascoe is a White House correspondent for NPR. She is currently covering her third presidential administration. Rascoe's White House coverage has included a number of high profile foreign trips, including President Trump's 2019 summit with North Korean leader Kim Jong Un in Hanoi, Vietnam, and President Obama's final NATO summit in Warsaw, Poland in 2016. As a part of the White House team, she's also a regular on the NPR Politics Podcast.
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