(CN) – Purdue Pharma has reached a proposed agreement to settle thousands of claims from cities, counties and tribes that sued the pharmaceutical giant over its role in the nationwide opioid epidemic.
The plaintiffs’ executive committee attorneys Paul Farrell, Paul Hanly and Joseph Rice said in a joint statement that they were recommending that more than 2,000 American cities and counties move forward with the settlement.
The committee said that it would “try to negotiate a final settlement agreement” and will continue with preparations for October’s trial in Cleveland against opioid manufacturers, distributors, and pharmacies.
“We believe that this settlement would bring desperately needed recovery resources into local communities that, for years, have been forced to shoulder the devastating consequences and financial burden of the opioid epidemic. We look forward to sharing more details about the resolution’s structure and terms in the near term,” the committee said in a statement.
Under the terms of the settlement, Purdue will dissolve and reform as a new company that still sells the opiate OxyContin, two people close to the negotiations told the New York Times. The company will pay up to $12 billion and donate so-called “rescue” drugs to aid addiction and overdoses. Proceeds from OxyContin would reportedly be held in a public beneficiary company for the plaintiffs.
The agreement would end all claims against the company, the Times reported. That means Purdue will likely avoid a major trial scheduled to begin Oct. 21 in Cleveland.
Some applauded the tentative settlement while others demanded that the Sackler family, which owns Purdue, face stiffer penalties.
Dave O’Neil, a spokesman for Ohio Attorney General Dave Yost, was supportive of the tentative settlement and said that Yost was involved in negotiations.
“The proposed settlement with Purdue provides the greatest certainty for all Ohioans to receive relief as quickly as possible in light of rumored bankruptcy,” O’Neil wrote in an email.
New York Attorney General Letitia James accused the Sacklers of evading responsibility for a crisis that had devastated communities across America.
“While our country continues to recover from the carnage left by the Sacklers’ greed, this family is now attempting to evade responsibility and lowball the millions of victims of the opioid crisis,” James said in a statement. “A deal that doesn’t account for the depth of pain and destruction caused by Purdue and the Sacklers is an insult, plain and simple.”
Richard Blondell, a professor at the State University of New York at Buffalo, and expert on substance abuse, said the proposed settlement did not go far enough.
“It’s a slap on the wrist just to make everybody feel good,” Blondell said in a phone interview. “They knew what they were doing, and they made a lot of money on the misery of millions of people.”
Court records show that Purdue knew that the prescription opioids it made were addictive but downplayed the risks and marketed them as a safe, reliable painkiller to increase sales. Purdue allegedly presented OxyContin as weaker than morphine even though it is twice as strong.
U.S. District Judge Dan Polster in Ohio is overseeing hundreds of cases in his courtroom. With the first trial set to begin next month, Purdue reportedly feared that judgments in more than 2,000 cases might sink the company, and will shortly file for Chapter 11 bankruptcy, according to reports.