Jessica Lilly Published

WVU Professor: More Questions Surround Purdue Pharma Settlement For Victims

Bottles of Purdue Pharma L.P. OxyContin medication sit on a pharmacy shelf in Provo, Utah, in 2016.

Purdue Pharma, the maker of OxyContin painkillers, recently pleaded guilty to criminal charges and has reached a $8.3 billion settlement with the Department of Justice for its role in the opioid crisis.

It’s one of a host of lawsuits that the pharmaceutical company is facing in light of the ongoing opioid epidemic that has hit West Virginia hard. The settlement is part of Purdue’s bankruptcy restructuring plan so it’s unclear just how or if this money will reach communities.

WVU Law Professor Patrick. McGinley is familiar with the role pharmaceutical companies have played in this crisis. On behalf of the Charleston Gazette-Mail, McGinley was part of a team that forced the federal government to unseal documents that revealed that 100 billion prescription opioid pills flooded the U.S. from 2006-2014.

He spoke with reporter Jessica Lilly about the settlement. Here’s some of that conversation.

***Editor’s Note: The following has been edited for clarity and length.

Lilly: Is this a fair settlement, in your opinion?

McGinley: Well, on its face to the average person on the street, $8.3 billion, seems like a lot of money. And it is. But there remains very serious and important questions about what the settlement really means. And whether all, part, or none of that money will go to local communities across the country. They’re suffering from the opioid epidemic and will continue to suffer for years in the future, because there are literally millions of Americans that are addicted to opioids.

Lilly: So what do you think is truly needed to make a difference given the scope of the problem?

McGinley: An enormous amount of money that in litigation brought by states, counties and cities across the country are 2,800 cases, experts for those government entities have estimated costs $2 trillion, $2 trillion, to deal with the opioid epidemic, (to) provide treatment for literally a couple of million people who are addicted, and also the kinds of medications that can help people who are addicted to begin living normal lives, and productive lives. And all that has a cost. And right now, across the country, plenty of West Virginia treatment programs are woefully underfunded.

Lilly: Who really gets this money?

McGinley: There will be no attorney’s fees, because this is a result of a federal investigation. The government now has reached a settlement. But it’s not at all clear whether local communities or states will receive any of it. Money goes to the federal government, the company itself was in bankruptcy. Before the company went into bankruptcy, the Sackler family that was the owner, the vast majority of the company withdrew $13 billion from the company. Now, the family claims that’s all legit. Critics, including States Attorneys General, say whoa, wait a second. And they should be contributing all their profits to a fund that will be distributed across the country to treat opioid addiction. And also, that this settlement contains a very unique and unusual provision. That is, while Purdue Pharma will no longer exist, the assets of Purdue Pharma, at least some of them, will go to the creation of a nonprofit public corporation that will sell Oxycontin and the profits from the sale of Oxycontin in the future by this nonprofit company. It’s not clear who’s going to run that. The federal government says this is really a positive development. So selling more Oxycontin across the country will fund treatment as part of the $8.3 billion. Critics find it problematic.

Lilly: So what’s the next step?

McGinley: Well, that’s a good question. That’s not clear. First of all, there has to be a determination by the bankruptcy court how much of the assets of Purdue Pharma can go to this settlement and how much has to go to secure priority creditors. So it could be $8.3 billion, it could be nothing.

Lilly: I can’t help but to think about the mother, the brother who suffered or who lost a loved one to an opioid overdose. Should those people listening feel hope because of the settlement?

McGinley: I think it’s far too early to conclude. I mean, I think this settlement is problematic. Critics say and I would agree that there’s not the accountability that those families should be able to expect when the federal government prosecutes criminals. But accountability is important. Where the money, if there’s any, where it goes is important, and we can’t say so. Is this justice? Excuse the expression, the jury’s still out.

Lilly: So in keeping with the bankruptcy laws and talking about bankruptcy, do you think that our bankruptcy laws are set up to help large corporations sort of get out of their responsibilities?

McGinley: Well, they may help small businesses. They’re really set up and they have the greatest effect when a major corporation seeks bankruptcy protection. What does that do? That allows them to shed themselves of all their debts, and in some instances, they can go on and reorganize, or another type of bankruptcy allows them to sell off their assets. This is one of those asset selling off types of situations. But the bankruptcy laws do need to be changed. We’ve seen this here in West Virginia with coal the coal industry. These days coal companies that put food on the table for West Virginians for decades, they’ve gone bankrupt not because of a war on coal, but because they couldn’t compete with natural gas, and renewables. And we have literally thousands of acres of land in West Virginia that are unreclaimed, that there’s no money to reclaim it. Because these companies went into bankruptcy. Citizens can demand a change. The change has to come through legislation. It could happen, but I think it needs to be grassroots ground up.

Lilly: Thank you so much for your time.

McGinley: Sure. My pleasure.