Purdue Pharma is edging closer to a new bankruptcy settlement with the Sackler family and state and local governments over lawsuits alleging the drugmaker’s role in fuelling the opioid crisis, a court-appointed mediator revealed on Thursday. Mediator Shelley Chapman told a federal court in New York that significant progress has been made towards resolving the dispute, though details of the deal remain undisclosed. She described the remaining hurdles as “resolvable” and emphasised that ongoing mediation required the “full, undistracted attention” of all parties.

U.S. Bankruptcy Judge Sean Lane subsequently extended the freeze on opioid-related lawsuits against the Sacklers until 2 December, heeding Chapman’s warning that allowing litigation to resume could derail negotiations and deplete funds intended for opioid creditors. “You can’t make war and peace at the same time,” Chapman reiterated during the hearing.

This development follows a landmark U.S. Supreme Court decision in June, which annulled a previous bankruptcy plan. That arrangement would have granted the Sacklers sweeping legal immunity in exchange for contributing up to $6 billion to address the opioid crisis. The Sacklers have faced widespread criticism and legal claims over accusations that they drained over $11 billion from Purdue Pharma and misled the public about the addictive nature of the company’s flagship painkiller, OxyContin.

Since filing for bankruptcy in 2019, Purdue has faced lawsuits from state and local governments, as well as individual claimants, accusing the company of deceptive practices that worsened the opioid epidemic. The company previously pleaded guilty to charges of fraud and misbranding in relation to its OxyContin marketing.

Should mediation fail, a committee representing Purdue’s creditors may pursue new legal action against the Sacklers. The stakes of the settlement are high, as it could determine the extent of resources allocated to mitigate the devastating social and economic impact of the opioid crisis.

Source: Reuters