West Virginia Attorney General issued the following announcement on Apr. 23.
West Virginia Attorney General Patrick Morrisey, with expressed support from 18 counties and 64 municipalities as well as pledged support from dozens of others, filed a formal objection Friday to a portion of Purdue Pharma’s bankruptcy plan, which the company recently filed in U.S. Bankruptcy Court for the Southern District of New York.
The filing seeks to ensure West Virginia receives its fair share of any settlement. It specifically objects to Purdue’s failure to disclose how its $7 billion proposal would be split among states.
The Attorney General’s objection expresses concern with indications that money would be distributed based on a state or local government’s population – not intensity of the problem. He argues this would violate the overriding principle of the case, namely that the money should go where it is most needed.
“Any settlement must reflect the disproportionate harm done in West Virginia,” Attorney General Morrisey said. “Our position has been clear and consistent. Any allocation plan must account for the intensity of the opioid addiction crisis and give each state the money necessary to fund meaningful remediation efforts in partnership with our local governments.”
The Attorney General’s objection argues that Purdue’s failure to disclose terms of the ultimate distribution plan undermines its desire to avoid court challenges to an inherently inequitable arrangement.
The objection further argues that an allocation plan based upon population – with only minimal consideration given to the intensity of the addiction epidemic – will render the broader bankruptcy plan unconfirmable since it would fail to account in any meaningful way for the great disparities in intensity of opioid addiction and opioid death that exist between the states.
The $7 billion proposal represents a combining of company assets and a guaranteed $4.275 billion from the Sackler family, a contribution of nearly 50 percent more than the family’s offer from two years ago. It also removes the family’s control and ownership of Purdue Pharma, effectively barring them from any future involvement in opioid sales in the U.S.
The Attorney General joined a preliminary framework with 27 attorneys general in September 2019 and has since filed a proof of claim in the matter on behalf of West Virginia.
Attorney General Morrisey filed suit against Purdue Pharma and former chief executive Richard Sackler in May 2019. The lawsuit alleges Purdue Pharma created a false narrative to convince prescribers that opioids are not addictive and that its opioid products were safer than they actually were.
The lawsuit contends Purdue Pharma proliferated a deceptive marketing strategy with reckless disregard for compliance enforcement. It also alleges company sales representatives routinely claimed that OxyContin had no dose ceiling, despite assertions by federal regulators that OxyContin’s dose ceiling was evident by adverse reactions.
The lawsuit marked West Virginia’s second against Purdue Pharma. The first, filed in 2001, resulted in a $10 million settlement in 2004, however, that case involved an earlier version of the opioid than the reformulated, so-called tamper-resistant OxyContin that debuted in 2010.
Original source can be found here.
