News USA The US Supreme Court blocks Purdue Pharma’s bankruptcy plan at the behest...

The US Supreme Court blocks Purdue Pharma’s bankruptcy plan at the behest of the Biden Administration

The US Supreme Court blocks Purdue Pharma’s bankruptcy plan at the behest of the Biden Administration

A bottle of the pain reliever OxyContin, a trademark of Purdue Pharma, in a pharmacy in Provo, Utah in 2019.GEORGE FREY (REUTERS)

The US Supreme Court has suspended this Thursday the agreement with the Sackler family, owner of Purdue Pharma, the manufacturer of the analgesic to which the opioid epidemic that the country is suffering is largely attributed, pending a review urged by the federal government. A federal appeals court had given the go-ahead to Purdue’s bankruptcy settlement, which would protect members of the wealthy Sackler family from lawsuits by thousands of opioid addiction victims in exchange for $6 billion in compensation. The temporary blocking of the agreement is the latest chapter in a long legal battle, against the backdrop of the worst public health crisis in the US between AIDS in the 1980s and the pandemic in 2020.

Purdue Pharma manufactured, marketed, and made its flagship product, the pain reliever OxyContin, the first choice of tens of thousands of physicians for the treatment of chronic non-cancer pain. But the drug soon hooked tens of thousands of Americans, an addiction that has caused more than 500,000 deaths in two decades. For many other addicts, taking OxyContin was the gateway to fentanyl, a synthetic drug 50 times more powerful than morphine.

Besieged by thousands of complaints from entities and individuals, the pharmaceutical company declared bankruptcy in 2019 with the intention of avoiding justice. But the Supreme has suspended the bankruptcy proceedings of Purdue Pharma and its subsidiaries, until the challenge by the Biden Administration of a lower court ruling confirming the agreement is resolved in December.

The order specifies that the judges will hear arguments in the case in December. The legal battle has been going on for years, and deals with the responsibility of the manufacturer of OxyContin but also, above all, with compensation for the victims of this crisis of addictions and overdose caused by a prescription drug.

During the long judicial process, the responsibility of the system has been proven, from the pressure of the Purdue Pharma lobbyists in Congress to the ease with which some officials who were targets of their campaigns easily passed through the revolving door of the Administration to end up working in the pharmaceutical. The system of incentives for salespeople or medical sales representatives also played a fundamental role due to the company’s aggressive marketing policy, including payments to doctors to give priority to the prescription of the product. Another key factor that explains the dimension of the crisis is the deceptive policy of diffusion and marketing of OxyContin, by supporting the pharmaceutical company and the family until the last minute that it did not cause addiction.

Purdue filed for Chapter 11 bankruptcy in 2019 to deal with its debts, derived from thousands of lawsuits. The bankruptcy agreement was approved in 2021, with the forecast of contributing in principle 10,000 million dollars to its creditors, among which are states and municipalities, addiction treatment and recovery centers, hospitals, survivors and relatives of the deceased, among others affected. But the Biden Administration and eight states challenged the deal. The latter agreed to withdraw after the Sacklers promised to contribute more money to the compensation fund.

In May, the 2nd Circuit upheld the agreement, finding that federal bankruptcy law allows legal protections for non-bankrupt parties – such as the Sacklers – in extraordinary circumstances. That court ruled that the legal claims against Purdue were inextricably linked to the claims against its owners, and that allowing lawsuits against the Sacklers would undermine Purdue’s efforts to reach a final settlement.

A group representing more than 60,000 plaintiffs supports resolution of the settlement on its current terms, including legal immunity for the family, believing that billions of dollars in compensation funds depend on confirmation and ratification of the plan now in suspense.

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