The Supreme Court put OxyContin maker Purdue Pharma’s bankruptcy settlement on hold Thursday in an order siding with the Biden administration’s request to reexamine provisions shielding the Sackler family from liability.
The single-page order does not contain a breakdown of the nine justices’ votes; it directs the parties to present their arguments before the high court in December.
The billionaire Sackler family, which controlled the pharmaceutical supplier since it was founded, has long been accused of unethically profiting off its addictive painkiller and fueling the nation’s opioid epidemic.
Purdue filed for bankruptcy in 2019 amid a flood of lawsuits from thousands of plaintiffs — including hundreds of Native tribes and most of the U.S. states ― over its aggressive OxyContin marketing strategies.
In 2021, the company reached a reorganization agreement that would dissolve Purdue and establish a new company, Knoa Pharma. The new company would “operate in a responsible and sustainable manner, taking into account long-term public health interests related to the opioid crisis,” Purdue Pharma announced at the time.
The Sacklers would relinquish control of the new corporate entity. In exchange, the family demanded personal immunity from liability in future civil lawsuits.
The deal was later amended to boost to $6 billion the amount the Sackler family would have to pay to settle lawsuits stemming from the opioid crisis, up from $4.5 billion. The U.S. Court of Appeals for the 2nd Circuit gave the arrangement a green light in May.
But the Justice Department says the bankruptcy court never had any right to release the Sackler family members from liability in the first place, as they were not filing for bankruptcy personally. That’s the question the Supreme Court will now have to address.
More than 1 million Americans have died of drug overdoses since the Centers for Disease Control and Prevention started tracking data on the problem more than two decades ago.
Researchers have found that Purdue Pharma put significant pressure on salespeople to promote OxyContin in medical facilities despite its potential for harm. The prescription drug can be deadly on its own, and if people struggling with addiction cannot obtain a prescription, they sometimes turn to street drugs like heroin.
Despite this, former Purdue executive Richard Sackler has said the family bears no responsibility for the opioid crisis.