The Supreme Court put a hold on a bankruptcy plan for Purdue Pharma, the manufacturer of OxyContin, while it reviews the legality of the plan which would shield the Sackler family, reigning owners of the drug company, from lawsuits. Amy Howe reports on ScotusBlog that the justices have agreed to hear oral arguments this December in the Biden administration’s appeal of a lower-court ruling approving the plan. No recorded dissents were indicated.
U.S. Solicitor General Elizabeth Prelogar argued that if the ruling by the U.S. Court of Appeals for the 2nd Circuit confirming the plan were allowed to stand, it would serve as a roadmap for wealthy corporations and individuals to sidestep mass tort liability through misuse of the bankruptcy system. Purdue, anticipating significant harm to victims of the opioid epidemic if the plan’s implementation is delayed, contested this viewpoint.
OxyContin, since its market introduction in 1996, raked in more than $35 billion in revenue for Purdue Pharma. However, the addictive opioid painkiller also unleashed a serious public health crisis, with a shocking quarter-million deaths resulting from overdosing on prescription opioids like OxyContin between 1999 and 2019.
Purdue Pharma pleaded guilty to federal criminal charges concerning OxyContin marketing in 2007 and 2020 and faced countless lawsuits accusing the company and the Sackler family of catalyzing the opioid epidemic through deceptive OxyContin marketing. In response to these lawsuits, Purdue filed for bankruptcy in 2019 and proposed reorganization into a nonprofit focused on addressing opioid epidemic-related issues.
Despite objections from parties such as the U.S. Trustee, the reorganization plan was confirmed by a Delaware bankruptcy court in September 2021. But, the plan was later rejected by a federal district judge. This led to Purdue’s appeal to the 2nd Circuit, which reversed the district court’s order and approved the plan in May of this year.
The Supreme Court’s hold will be in place temporarily, with the case set for oral argument in December. A likely decision will follow sometime next year.