WV Attorney General opposes multi-billion dollar settlement with Purdue Pharma

West Virginia

FILE – In this Oct. 21, 2020, file photo, Purdue Pharma headquarters stands in Stamford, Conn. In an agreement disclosed late Wednesday, July 7, 2021, in a filing in U.S. Bankruptcy Court in White Plains, N.Y., more than a dozen states have dropped their objections to OxyContin maker Purdue Pharma’s reorganization plan, edging the company closer to resolving its bankruptcy case. (AP Photo/Mark Lennihan, File)

CLARKSBURG, W.Va. — West Virginia Attorney General, Patrick Morrisey, reiterated his opposition on Thursday to how a multibillion-dollar settlement with Purdue Pharma may be split among states. The Attorney General also applauded news that continued negotiations have yielded commitments for more money and greater accountability as part of the proposed settlement.

“We still need more resources for West Virginia and greater accountability from Purdue,” said Attorney General Morrisey. “I remain vigorously opposed to a proposed allocation formula that would distribute settlement funds largely based on a state or local government’s population. Any such allocation formula is harmful to West Virginians, and fails to recognize the disproportionate harm caused by opioids in our state.”

Morrisey said he looks forward to arguing this case in court this August.

The Attorney General, with support from several dozen counties and municipalities, prevailed in April by forcing Purdue Pharma to disclose how its bankruptcy plan would shortchange West Virginia.
 
The Attorney General’s objection, filed in U.S. Bankruptcy Court for the Southern District of New York, had argued that Purdue’s failure to disclose how its multibillion-dollar proposal would be split among states undermined its desire to avoid court challenges to an inherently inequitable arrangement.
 
Purdue Pharma responded days later by disclosing publicly the once-closely held Denver Plan, which the Attorney General opposes since it would distribute settlement funds largely based on population – not intensity of the problem.

To that end, the Attorney General has argued that an allocation plan based upon population – with only minimal consideration given to the intensity of the addiction epidemic – will render the broader bankruptcy plan unconfirmable since it would fail to account in any meaningful way for the great disparities in the intensity of opioid addiction and opioid death that exist between the states.
 
The Attorney General joined a preliminary framework with 27 attorneys general in September 2019 and has since filed a proof of claim in the matter on behalf of West Virginia. Fifteen additional states signed onto the deal late Wednesday.

The new settlement terms call for Purdue to make tens of millions of internal documents public, a step several attorneys general, including those for Massachusetts and New York, had demanded as a way to hold the company accountable.

In a joint online news conference Thursday, some of the attorneys general who signed on noted that their states are in line to get more money faster to fund drug treatment and prevention. But they continued to express ire with the company and especially members of the wealthy Sackler family who own the company and have not accepted any blame.

“No one is happy with the settlement,” New York Attorney General Letitia James said. “Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology.”

North Carolina Attorney General Josh Stein noted Thursday that the deal includes about $1.5 billion more than it initially did.

However, nine states and the District of Columbia did not sign on. One of the holdouts, Washington Attorney General Bob Ferguson complained: “This settlement plan allows the Sacklers to walk away as billionaires with a legal shield for life.”

Purdue said in a statement that it will try to build “even greater consensus” for its plan.

Attorney General Morrisey filed suit against Purdue Pharma and former chief executive Richard Sackler in May 2019. The lawsuit alleges Purdue Pharma created a false narrative to convince prescribers that opioids are not addictive and that its opioid products were safer than they actually were.

The lawsuit contends Purdue Pharma proliferated a deceptive marketing strategy with reckless disregard for compliance enforcement. It also alleges company sales representatives routinely claimed that OxyContin had no dose ceiling, despite assertions by federal regulators that OxyContin’s dose ceiling was evident by adverse reactions.

The lawsuit marked West Virginia’s second against Purdue Pharma. The first, filed in 2001, resulted in a $10 million settlement in 2004. However, that case involved an earlier version of the opioid than the reformulated, so-called tamper-resistant OxyContin that debuted in 2010.

To read a copy of the Attorney General’s objection, click here. To read the Denver Plan disclosure, click here.

The Associated Press contributed to this report.

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