When it filed for bankruptcy last year, Purdue Pharma agreed to an innovative plan: it will make $ 200 million immediately available to help people harmed by its signature painkiller, OxyContin, and alleviate the effects of the opioid crisis.
More than a year later, as the crisis worsened, not a penny was spent.
“The money just sits in Purdue’s bank account and collects dust,” said Ed Neiger, a lawyer representing opioid victims. – It’s an epic scale.
Purdue is not holding back the money. Instead, lawyers represent the company in litigation, who sue the company who can’t agree on the best way to use it. The main disagreement is between nearly 3,000 local governments and advocates for opioid victims.
Proponents want the money to go mostly to local nonprofits that provide relief to addicts. State prosecutors say this would dilute the money so much that it would not be effective. Because Purdue has a long process of distributing wealth, states also consider the possibility of allocating billions of dollars over time to be more important than $ 200 million.
“You see state AGs coming in and blocking the money, and you don’t understand why,” said Jill Cichowicz, who lost her twin sister due to an overdose and sits on the Purdue Bankruptcy Committee for Victims. – We are all confused.
Purdue filed for bankruptcy last year in order to settle thousands of lawsuits aimed at holding the company accountable for the crisis that has led to 470,000 deaths in the United States since 2000. In a separate case, a broader agreement with the Department of Justice pleaded guilty on Tuesday.
The proposal, considered by the bankruptcy court, says members of the Sackler family who own the Purdue will pay at least $ 3 billion and give up ownership of the company. Purdue would then become a public benefit company, its profits easing the overdose crisis, including by increasing treatment capacity and providing other addiction services.
The company said the total value of the deal could exceed $ 10 billion over time.
Public prosecutors – all of whom have sued Purdue – disagree that this is the right approach.
They don’t just have to be convinced. The creditors ’committee must also agree, which includes people recovering or who have lost loved ones due to an overdose. This group proposed a $ 200 million aid fund after Purdue filed for bankruptcy in September 2019.
The fund was inspired by finances passed last year in the case of Pacific Gas and Electric Co., a huge California utility company that went bankrupt because the lawsuits blamed California fires.
Neiger, who represents a committee of victims in a complicated legal battle, says the idea for the aid fund is so novel that even bankruptcy law doesn’t recognize it, but it was accepted by federal bankruptcy judge Robert Drain.
The plan was to distribute money to groups that provided addiction to shelters, linked to services, and provided overdose of antidotes. In the case, it was up to the parties to work out the details.
With the disagreement over where the money should go and by whom, it didn’t happen.
In a statement read at the April hearing, a group of lawyers said they would suspend talks on the use of aid money while focusing on wider mediation on the use of Purdue’s assets.
The statement stated that “despite the best intentions of all parties”, the parties to the case had “deeply grounded, fundamental disagreements” over the best use of the money. They said they talked about straining their efforts to figure out what to do with the billions that could eventually come from Purdue. It was planned to reconsider the issue later.
Since then, the broader question of where settlement money goes has been resolved through mediation. State and local governments have agreed to devote their full share to crisis mitigation programs. This is a significant development, but it doesn’t bring the quick help needed for the $ 200 million fund. And there is no indication as to when discussions on the aid fund will resume.
Proponents of drug use disorders said local nonprofits could have used the money to help more people immediately.
“If you gave them a million dollars, they could do a lot more than just give them to a government agency,” said Cichowicz, whose twin brother, Scott Zebrowski, fatally overdosed in 2017 on a fake OxyContin pill containing fentanyl. The former head of the gym was 38 years old.
Cichowicz, who lives in Richmond, Virginia, said his brother became addicted after OxyContin was prescribed for back pain in 2014.
As long as the case is circumvented, the addiction problem will only deepen. There were a record 71,000 overdose deaths in the United States last year, most of them due to opioids. Preliminary data show that the number of deaths is even higher this year. Experts say this may be due in part to personal counseling lost during a coronavirus outbreak.
Brandon George, director of the Indiana Addictions Issues Coalition, said the epidemic consumed almost all of the energy in county health departments and left local healing organizations to distribute naloxone, an antidote to overdose. He expects mental health services to decline as state and local tax revenues decline.
George said he never expected the Purdue Relief Fund to raise money for the groups quickly, but that could have changed.
“This money could certainly have been put to good use,” he said. “Right now, our health systems are very tense.”
Mulvihill reported from Davenport, Iowa. Follow him here: http://www.twitter.com/geoffmulvihill.