CHARLESTON — West Virginia Attorney General Patrick Morrisey says he will vote against confirming Purdue Pharma’s bankruptcy plan.
During a July 13 press briefing, Morrisey touched on several topics related to the state’s opioid litigation and other issues in the fight against drug abuse.
Morrisey said his issue with the multibillion-dollar Purdue Pharma settlement is the proposed plan to divide it between states.
“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,” Morrisey said. “Any such allocation formula fails to recognize the disproportionate harm caused by opioids in our state.
West Virginia suffered the greatest weight of this epidemic. For the better part of 20 years, West Virginia has been out there, for many years, on its own. We need to solve this problem. That’s critical. That’s most certainly my goal.”
The Attorney General contends that the proposed settlement fund allocation plan, which is largely based on population, does not address the disproportionate harm that has been caused by opioids in West Virginia.
“I look forward to arguing our case in court this August,” Morrisey said noting that he will make this argument in person in U.S. Bankruptcy Court for the Southern District of New York next month.
Morrisey also was again critical of California, the only state that has said it wouldn’t contribute 1 percent of a settlement to an intensity fund to help states, such as West Virginia, that have smaller populations but have been hit hard by the opioid epidemic.
For example, if California received $6 billion in a Purdue Pharma settlement, 1 percent of that would be $60 million.
“California wants to keep all of it for itself,” Morrisey said. “They don’t want to help a handful of states that are population poor, and that isn’t fair to everyone else who has agreed to the intensity fund.”
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. 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.
Morrisey’s office filed suit against Purdue Pharma and former chief executive Richard Sackler in May 2019 claiming 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.
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 $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.
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.
During Tuesday’s briefing, Morrisey also addressed other pending litigation against opioid manufacturers and national chain distributors.
Regarding a similar settlement with Mallinckrodt, Morrisey said the drug manufacturer is expected to follow the same formula Purdue is trying to use. If so, Morrisey said the state also will fight that plan and vote no on September 3.
Morrisey also mentioned how his office laid the foundation for the City of Huntington and Cabell County to be able to sue AmerisourceBergen, Cardinal Health and McKesson in federal court. Testimony in that trial ended July 12, and closing arguments are scheduled for July 27-28.
“The agreements our office struck years ago specifically carved out state settlements so cities and counties could file their own claims,” Morrisey said. “We’re rooting for them (Huntington and Cabell). It’s hard to predict when we’ll get the judgment, but we’re doing everything we can to be helpful.”
He also said the $10 million the state received earlier this year as part of a settlement with McKinsey is “a good start … to have a meaningful recovery fund. An abatement fund.”
Following a recent state Supreme Court decision, Morrisey also said his office is asking the court’s Multi-Litigation Panel to take its opioid case to go to trial early next year. The Supreme Court ruling lifted a stay and will allow discovery to go forward.
“We need this because the harm continues,” Morrisey said. “The sooner we go to trial, the better it will be for the citizens of West Virginia.
“If I have my druthers, I want to put as many dollars in recovery as possible. We have to do this the right way. Of course, attorneys fees always are involved. But I hope everyone involved does things for the right reasons, not just to get rich. This is a hugely important matter.”