• by Thom Forbes  @tforbes, March 27, 2019

Purdue Pharma yesterday agreed to pay $270 million to the state of Oklahoma to settle a lawsuit over the deceptive marketing of its prescription painkiller, OxyContin, and its role in creating opioid dependencies. Johnson & Johnson, Teva and other defendants named in the lawsuit still face a trial scheduled to start May 28.

“Purdue will immediately contribute $102.5 million to establish a new foundation for addiction treatment and research at Oklahoma State University. Members of the Sackler family, who own the company but were not defendants in the case, will pay an additional $75 million in personal funds over five years. Purdue also will provide $20 million worth of treatment drugs, pay $12 million to cities and towns and cover about $60 million in litigation costs,” Lenny Bernstein and Katie Zezima write for the Washington Post.

It's “the first deal to resolve more than 1,600 lawsuits blaming the OxyContin maker for fueling the opioid crisis, a move that could lay the groundwork for the resolution of the rest of the litigation,” Sara Randazzo writes for  the Wall Street Journal. “The televised trial could have exposed the company to potentially damaging testimony and an unpredictable jury verdict,” she adds.

“The settlement ‘signals there’s blood in the water now,’ University of Georgia law professor Elizabeth Chamblee Burch said. She said Tuesday’s news may lead to a ‘feeding frenzy' as cities, counties and states try to ensure they can still get money from Purdue Pharma,” Eric Heisig writes for cleveland.com. 

“Now the concern is, if somebody is threatening bankruptcy, if you are the last one to settle, there may be nothing left,” Burch said.

“‘I see this as a one-off tied to Purdue’s limited financial resources,’ said Richard Ausness, a University of Kentucky professor who teaches about mass-tort law. 'I think these other companies will wait to see the outcome of some of these test trials before they get serious about settling,’” Jef Feeley reports for Bloomberg.

“Purdue, in particular, has been painted as the arch-villain of the opioid disaster, and the company has been feeling exceptional heat in recent months,” Jan Hoffman writes for the New York Times.

“Not only was the company staring down an impending trial … with cameras in the courtroom, but documents made public recently in a case brought by the state of Massachusetts accused Sackler family members of directing efforts to mislead the public about OxyContin’s potency and addictive properties. A number of museums and cultural institutions around the world have recently stopped taking donations from the Sacklers, who have a long record of philanthropy,” Hoffman continues.

The settlement certainly sets a higher bar than has been evident in the past. 

“Oklahoma settles with Purdue Pharma just like WV but for $260 million more,” reads the headline of Jeff Jenkins’ story in the West Virginia Metro News.

The settlement “is 27 times more than what then-West Virginia Attorney General Darrell McGraw settled with Purdue Pharma over OxyContin in 2004. The state received $10 million over a four-year period” for a lawsuit filed in 2001 claiming Purdue’s marketing of OxyContin in West Virginia led to addiction, Jenkins reports.

Neither Purdue not the Sackler family admitted guilt in yesterday’s civil settlement. 

“But it marks a turning point in the nationwide effort by local governments to force the pharmaceutical group to pay for the skyrocketing healthcare costs blamed on opioid addiction. According to the U.S. Centers for Disease Control and Prevention, more than 183,000 Americans died from an overdose involving a prescription opioid between 1999 and 2015. The number of annual fatalities has quadrupled over the same period,” Hannah Kuchler points out for Financial Times.

The settlement will establish a nearly $200 million endowment at the Oklahoma State University’s Center for Wellness and Recovery, “which will go toward treating the ongoing addiction epidemic nationwide,” according to the release issued by Oklahoma attorney general Mike Hunter.

“Standing before a packed hall on the campus of Oklahoma State University Center for Health Sciences, Dr. Kayse Shrum reminded everyone in the audience of how prevalent addiction is. As the president at OSU Center for Health Sciences, Shrum has seen that addiction touches all walks of life,” Adam Kemp reports for The Oklahoman.

“This isn’t a moral problem with people,” Shrum said. “This is actually a disease, and a disease we have to research and we have to treat.”