Purdue Pharma settles with Oklahoma in landmark opioid lawsuit

Purdue Pharma and the state of Oklahoma have agreed to a $270 million settlement in a lawsuit that claims the illegal marketing of OxyContin helped lead to the opioid crisis.

The deal could influence the thousands of lawsuits facing opioid companies across the country. Nearly every state has filed lawsuits against drugmakers, distributors and retailers.

Experts said the Oklahoma lawsuit is likely to be a preview of the legal arguments presented to a jury in a federal opioid trial in October.

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Much of the settlement from Purdue will go toward establishing a National Center for Addiction Studies and Treatment at Oklahoma State University in Tulsa.

Purdue will contribute $102.5 million to fund the creation of the National Center. Members of the Sackler family, who own Purdue but were not defendants in the case, have pledged to contribute $75 million over five years.

The company said it will also donate $20 million worth of medication to support the center’s treatment mission.

The agreement with Oklahoma, which resolves all of the state’s claims against Purdue, also includes an additional company payment of $72.5 million, with up to $60 million available for costs and fees related to the litigation and $12.5 million available to counties and cities in the state to help mitigate the effects of the opioid crisis.

“We see this agreement with Oklahoma as an extension of our commitment to help drive solutions to the opioid addiction crisis, and we pledge Purdue’s ongoing support to the National Center and the life-saving work it will do for generations to come,” Craig Landau, Purdue Pharma’s CEO said in a statement.

Attorneys for Purdue and Oklahoma have been negotiating in court-appointed mediation for months, state Attorney General Mike Hunter said. According to Hunter, Purdue's recent acknowledgement that it was considering bankruptcy played a role in the settlement.

"We had to take into account they were modeling bankruptcy, and that was a serious exercise with them," Hunter said during a press conference. 

Hunter filed a lawsuit against Purdue, Allergan, Johnson & Johnson and Teva in 2017, contending that the companies bear responsibility for “the catastrophic damage the state has suffered from the current public health crisis.”

The Oklahoma lawsuit accused Purdue and other drugmakers of aggressively pushing opioid products with deceptive marketing tactics and deliberately obscuring their addictiveness.

The lawsuit says the companies deliberately marketed their drugs as safe for chronic pain management while downplaying the risks of opioid dependency and overstating their effectiveness.

According to the state, nearly 50 percent of Oklahomans who died from a drug overdose in 2018 were attributed to a pharmaceutical drug. In addition, out of the more than 3,000 Oklahomans admitted to the hospital for a non-fatal overdose, 80 percent involved a prescription opioid medication.

“The addiction crisis facing our state and nation is a clear and present danger,” Hunter said in a statement. "Deploying the money from this settlement immediately allows us to decisively treat addiction illness and save lives."

Purdue is widely blamed for helping to start the opioid epidemic after it introduced OxyContin to the market in 1996 and is facing a host of lawsuits for allegedly convincing doctors to overprescribe the powerful narcotic. Purdue has denied the allegations contained in the lawsuits and is mounting a vigorous defense.

In 2007, the company and three executives pleaded guilty in federal court to understating the risk of addiction to OxyContin, including failing to alert doctors that it was a stronger painkiller than morphine, and agreed to pay $600 million in fines and penalties.

A lawsuit in Massachusetts alleges that members of the Sackler family were personally involved in marketing and sales strategies and aggressively pushed company officials to drive up sales of its painkillers from 2007 through 2018.

Attorneys suing Purdue on behalf of local governments across the country on Tuesday praised the settlement.

"This settlement is another reflection of the extraordinary importance and strength of the claims against Purdue Pharma," Paul Hanly, Paul Farrell and Joe Rice said in a joint statement. 

"There are nearly two dozen other defendants with pending allegations against them in federal court. We believe all of these defendants—opioid manufacturers, distributors, and pharmacies—must be held responsible for their role in the epidemic,” the attorneys said. 

The settlement in Oklahoma is only with Purdue, and the state is still able to pursue litigation against Teva, Allergan and Johnson & Johnson. The companies are slated to go on trial May 28, and the presiding judge agreed to televise the proceedings live.

Hunter said the Oklahoma settlement should not be considered the end of the state's litigation.

"We still have three defendants, and we intend to hold those companies responsible for the mess they made in this state," Hunter said. "This is one piece of a comprehensive approach the state is taking to deal with the epidemic and its fallout."

Purdue and other manufacturers face similar claims in courts across the country, and this settlement could help set the bar for compensation sought by cities, counties, Native American tribes and others.

Updated at 5:12 p.m.