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Purdue Pharma scrambles to deter DOJ’s bankruptcy appeal: NPR


Purdue Pharma headquarters in Stamford, Connecticut on April 2, 2019. As a federal judge nears approval of the company’s controversial Chapter 11 plan, the company is working behind the scenes to anticipate a legal challenge by the Ministry of Justice.

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Purdue Pharma scrambles to deter DOJ’s bankruptcy appeal: NPR

Purdue Pharma headquarters in Stamford, Connecticut on April 2, 2019. As a federal judge nears approval of the company’s controversial Chapter 11 plan, the company is working behind the scenes to anticipate a legal challenge by the Ministry of Justice.

Drew Angerer / Getty Images

Purdue Pharma has launched a behind-the-scenes effort in recent days to discourage the Justice Department from appealing a pending multibillion-dollar bankruptcy settlement for the maker of OxyContin.

NPR acquired a first draft of a letter distributed by the pharmaceutical company to groups favorable to the bankruptcy agreement.

The letter is intended as a direct appeal to DOJ officials and purports to be written by those injured by the business and members of the Sackler family.

“We speak collectively on behalf of the overwhelming majority of state and local governments, organizations and individuals harmed by Purdue and the Sacklers,” the letter reads.

There is no mention in the document of the company’s role in initiating the effort or shaping the message.

The pre-emptive lobbying campaign comes as Federal Judge Robert Drain announced he would approve the plan Wednesday at a hearing in White Plains, NY

Three sources familiar with the effort described it in detail to NPR.

Two of the people suggested that Purdue Pharma was engaged in a good faith offer to protect a fragile settlement, which has won support from most state and local governments that have sued the Sacklers and their drug company.

A third source expressed unease over the company’s efforts to dissuade the DOJ from appealing.

All three have indicated that a challenge by the Department of Justice of a confirmed plan seems likely, but not certain.

They agreed to speak only on substance due to the sensitive nature of the last minute negotiations to gain further support for the deal.

The letter warns that any appeal from the Justice Department “would jeopardize the delivery of billions of dollars” to communities struggling with high rates of drug addiction, overdose and death.

The language of the document suggests that Purdue Pharma hoped it would eventually be signed by state attorneys general, local government officials, hospitals and a group representing individual victims of the company’s opioid products.

Purdue Pharma declined to answer questions about the letter or the bankrupt company’s offer to influence DOJ’s decision-making.

The Justice Department has not said conclusively whether it will challenge the settlement in court and has denied NPR’s request for comment.

The Justice Department condemned the deal

The deal has sparked intense controversy in part because it would grant broad immunity from opioid-related lawsuits to members of the Sackler family as well as hundreds of their associates.

Sackler’s remaining empire – including pharmaceutical companies headquartered abroad – will be immune from opioid liability, as will other independent companies that have partnered with Purdue Pharma.

The Sacklers would admit no wrongdoing and will remain one of the richest families in the world.

In return, they would pay more than $ 4.3 billion over the next decade, most of which would go to fund drug addiction treatment and other health care programs designed to alleviate the opioid crisis.

In a two-week bankruptcy lawsuit that ended on Friday, lawyers from two different branches of the DOJ said an appeal was possible.

They argued that the liability waivers demanded by the Sacklers are illegal and would violate the constitutional rights of those who might assert their rights against the family.

In a legal brief, Department of Justice attorney William Harrington accused the Sacklers of playing with the bankruptcy system to avoid accountability for “alleged wrongdoing by concocting and perpetuating for profit one of the most serious public health crises ever in the United States ”.

The letter written by Purdue Pharma on behalf of the company’s victims urges the DOJ to agree to the settlement with the Sacklers.

The letter describes an agreement granting family members protection from opioid-related lawsuits as “flawed [but] better for those affected by the opioid epidemic than any other alternative. “

Purdue Pharma has long worked to influence DOJ decisions

Sources knowledgeable about Purdue Pharma’s lobbying efforts have suggested such efforts are common in complex bankruptcy cases.

They also suggested that the letter the company wrote be rewritten before it was sent to the Department of Justice.

Members of the Sackler family played no role in drafting the document. It was not clear how many organizations involved in the bankruptcy deal could ultimately sign it.

Purdue Pharma has a long and successful history of lobbying decision makers at DOJ.

In 2007, company lawyers pressured Justice Department officials to drop plans to bring criminal charges against company executives for illegal opioid marketing programs.

Instead, Purdue officials pleaded guilty to misdemeanor charges and paid more than $ 600 million in fines.

“At the eleventh hour, senior politicians in the Department of Justice blocked these indictments and as a result a much weaker set of plea deals were made with these Purdue executives, which really amounted to to a slap on the wrist, ”said Senator Maggie. Hassan, DN.H., in a 2019 interview with NPR.

Last year, faced with the threat of new federal charges, the company once again negotiated with the DOJ.

Purdue Pharma ultimately pleaded guilty to serious felonies for the deceptive marketing of OxyContin, but no individual charges have been filed against company executives.

As part of the deal, the Sacklers agreed to pay the DOJ $ 225 million as part of a civil settlement. They have not been charged with any crime and have not admitted to any wrongdoing.

Some lawmakers push DOJ to appeal Purdue Pharma plan

Purdue Pharma is not alone in trying to influence the DOJ’s decision whether or not to challenge the bankruptcy settlement after its approval.

Earlier this month, four Democratic lawmakers – two U.S. senators and two members of the House – wrote a letter to Attorney General Merrick Garland urging him to block implementation of the plan.

“There is still time for the DOJ to play a key role in this case by calling for an immediate direct appeal (…) on the constitutionality of the plan’s non-consensual releases by third parties,” the lawmakers wrote.

Senators Elizabeth Warren, D-Mass., And Richard Blumenthal, D-Conn., Signed the letter, as did Representatives Carolyn Maloney, DN.Y., and Mark DeSaulnier, D-Calif.

During the bankruptcy trial, meanwhile, critics of the plan suggested an appeal is almost certain, if approved by Drain, the judge.

“We urge you not to make the historic mistake of upholding this plan,” argued Matthew Gold, a lawyer representing Washington, Oregon and the District of Columbia, who still opposes the settlement.

“The plan contains fatal flaws [and] will be overturned on appeal, ”Gold said at a hearing on Aug. 23.

Supporters of the plan say it will help ease opioid crisis

But supporters of the plan argue it would quickly distribute money to fund drug treatment and other health care programs designed to ease the opioid crisis.

“A long, messy appeal does not help those still struggling, nor does it help rebuild communities devastated by the crisis,” argued Arik Preis, a lawyer representing groups aggrieved by Purdue Pharma who passed the settlement. He also spoke at the August 23 bankruptcy hearing.

Purdue Pharma introduced OxyContin in the late 1990s. Critics say the company’s aggressive and sometimes deceptive marketing campaigns convinced doctors to prescribe opioids more generously, helping usher in the deadly opioid crisis.

More than 500,000 Americans have died from fatal overdoses, according to the Centers for Disease Control and Prevention.

By their own estimate, the Sacklers made more than $ 10 billion from opioid sales, although they say almost half of that money was used to pay taxes.

Family members who have served on Purdue Pharma’s board of directors have repeatedly stated that they have done nothing wrong and acted ethically.

However, documents released during court proceedings show that some family members pushed sales of highly addictive opioid pills long after rates of abuse and overdose rose.

During the lawsuit, Drain urged those involved in crafting the bankruptcy agreement to restrict the disclaimers of liability for the Sacklers and their associates.

But during a final hearing on Friday, Drain expressed at length his fear that the agreement would still be challenged on appeal. He warned that such a call would delay the distribution of desperately needed funds.

“One thing that is clear from the trial record is that time is nobody’s friend,” Drain said.