Aug 10, 2023 - Health

Supreme Court stops Purdue Pharma bankruptcy deal

Illustration: Shoshana Gordon/Axios

The Supreme Court on Thursday froze a bankruptcy reorganization plan for OxyContin maker Purdue Pharma that would have shielded members of the Sackler family, who own the company, from civil claims in exchange for paying up to $6 billion to address the U.S. opioid crisis.

  • Justices will review the agreement and hear arguments in the case in December.

The big picture: It marks a win for the Biden administration after the Justice Department argued the bankruptcy court couldn't grant the family members legal immunity from claims by opioid victims.

  • Purdue said it was confident in the legality of the reorganization plan and optimistic the high court would agree, per NBC News.

Background: The 2nd U.S. Circuit Court of Appeals ruled in May that the bankruptcy plan could proceed, reversing a lower court ruling against immunity since the Sackler family members weren't declaring bankruptcy themselves.

  • The deal furthered a settlement that would send billions of dollars to states, local governments and Indigenous tribes affected by the opioid epidemic.
  • But experts questioned whether it would lead to copycat cases, in which corporations tried to limit liability through bankruptcy courts.
  • Purdue filed for bankruptcy in 2019 after facing thousands of lawsuits over its marketing of the highly addictive painkiller OxyContin.

Sabrina Moreno contributed to this report.

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