CHARLESTON — West Virginia Attorney General Patrick Morrisey reiterated his opposition to how a multibillion-dollar settlement with Purdue Pharma may be split among states, while he also applauded news that continued negotiations have yielded commitments for more money and greater accountability as part of the proposed settlement.
“We still need more resources for West Virginia and greater accountability from Purdue,” Morrisey said in a July 8 press release. “I remain vigorously opposed to a proposed allocation formula that would distribute settlement funds largely based on a state or local government’s population – not intensity of the problem.
“Any such allocation formula is harmful to West Virginians, and fails to recognize the disproportionate harm caused by opioids in our state. I look forward to arguing our case in court this August."
Morrisey, with expressed support from 18 counties and 64 municipalities as well as pledged support from dozens of others, forced Purdue Pharma in April to disclose how its bankruptcy plan would shortchange West Virginia. Filed in U.S. Bankruptcy Court for the Southern District of New York, Morrisey's objection claimed Purdue’s failure to disclose how its multibillion-dollar proposal would be split among states undermined its desire to avoid court challenges to an inherently inequitable arrangement.
Purdue Pharma responded days later by disclosing publicly the once-closely held Denver Plan, which Morrisey opposes because it would distribute settlement funds largely based on population rather than intensity of the problem.
In March, Morrisey said he wants to do what’s best for the state, and he doesn’t know if that means signing off on Purdue Pharma’s $7 billion bankruptcy plan.
“No amount of money can wipe away the devastation caused by opioids in West Virginia,” Morrisey said. “Through this bankruptcy process, I will remain focused upon securing the best deal for West Virginia, one that puts the Mountain State first and recognizes the significant amount of devastation caused here as compared to other areas.
“I still have concerns with the current proposal, but will continue working to improve it and hold Purdue and responsible individuals accountable.”
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. The bankruptcy plan also removes the Sackler family’s control and ownership of Purdue Pharma, effectively barring them from any future involvement in opioid sales in the United States.
The bankruptcy plan says assets from Purdue Pharma will be transferred to a new company that will emerge from the bankruptcy with an independent board of directors and oversight by a court-appointed monitor.
Morrisey has argued 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.
Morrisey 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. Fifteen additional states have signed onto the deal.
Morrisey's office filed suit against Purdue Pharma and former chief executive Richard Sackler in May 2019 alleging the company created a false narrative to convince prescribers that opioids are not addictive and that its opioid products were safer than they actually were. It says 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 is West Virginia’s second against Purdue Pharma. The first, filed in 2001, resulted in a $10 million settlement in 2004. But that case involved an earlier version of the opioid than the reformulated, so-called tamper-resistant OxyContin that debuted in 2010.