World News | Ruling clears way for Purdue Pharma to settle opioid claims, shields Sacklers from lawsuits

WASHINGTON, May 30 (AP) — A federal court ruling on Tuesday clears the way for OxyContin maker Purdue Pharma to settle thousands of legal claims over opioid charges.

The 2nd U.S. Circuit Court of Appeals in New York overturned a 2021 ruling that a bankruptcy court judge had no authority to protect members of the Sackler family who own Purdue and did not file for bankruptcy themselves from civil lawsuits.

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Those protections are at the heart of a proposed deal that would end claims against Purdue by thousands of state, local and Native American tribal governments and other entities.

Under the plan, members of the Sackler family would relinquish ownership of Stamford, Connecticut-based Purdue University, which would become a new company called Knoa, whose profits would be used to fight the opioid crisis.

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They will also contribute $5.5 billion to $6 billion in cash over time.

Much of that — at least $750 million — will go to individual victims of the opioid crisis and their survivors.

Members of the Sackler family have made it clear: If they are not protected by the law, they will not do their job.

Several states have resisted backing the plan, but after a new round of negotiations this year, all agreed.

Only one high-profile opponent remains: the Office of the U.S. Bankruptcy Trustee, a branch of the Justice Department.

An attorney for the office told the Second Circuit in April 2022 that it was a “fundamental inconsistency” that people who do not seek bankruptcy protection and have to give up most of their assets are immune from certain lawsuits.

The settlement must still be approved by a bankruptcy court judge before it can be finalized.

The new ruling is also likely to be put on hold pending an appeal to the U.S. Supreme Court.

Purdue may be the highest-profile company in the opioid industry.

But several other drugmakers, distribution companies and pharmacies have also been sued by state and local governments.

While a handful of cases have gone to trial, many others are in the process of being settled.

The total value of proposed and finalized settlements in recent years exceeds $50 billion.

Companies that struck deals include drugmakers Johnson & Johnson and Teva; distribution giants AmerisourceBergen, Cardinal Health and McKesson; and drugstore chains CVS, Walgreens and Walmart.

Much of the money is needed to fight the opioid crisis, which has been linked to more than 500,000 deaths in the United States over the past two decades. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)