Governor Andrew M. Cuomo has announced a $4.5 billion settlement with Purdue Pharma over the company’s role in falsely marketing its products.
The owners of Purdue Pharma, the Sackler family, will be required to pay $4.5 billion over the next nine years, with New York state expected to receive at least $200 million.
Funding from the settlement will be used to fund opioid prevention, treatment and recovery programs in communities across the country, and thousands of individual victims will also receive compensation as part of Purdue’s bankruptcy process. Additionally, the settlement requires the Sackler family to relinquish control of family foundations to the trustees of a contemplated National Opioid Abatement Trust dedicated to abating the opioid crisis.
“The opioid epidemic was created by unscrupulous opioid companies who put personal profit over the health and safety of our state, and countless New Yorkers have suffered as a result,” Cuomo said in a press release issued by the New York State Department of Financial Services (DFS). “The families and loved ones who have been impacted by this crisis deserve justice, and this agreement with Purdue is just the first step in affording some measure of accountability for the human and financial toll they have inflicted.”
The settlement between New York State and Purdue Pharma shuts down Purdue Pharma and prevents the Sackler family from manufacturing opioids in the future. The agreement also prohibits the Sackler family from requesting or permitting any new naming rights in connection with charitable or similar donations or organizations for the next nine years.
Additionally, the agreement will make public documents related to the company and the family’s role in fueling the opioid epidemic, including confidential communications and documents related to the sale and marketing of dangerous opioid products.
If approved by the bankruptcy court, the settlement would also resolve DFS bankruptcy claim against Purdue. In September 2019, Governor Cuomo and DFS announced a broad investigation into the opioid crisis and the effect it has had on the insurance industry and health insurance premiums for consumers.
In July 2020, DFS filed a proof of claim in the Purdue bankruptcy for monetary penalties that DFS is statutorily authorized to levy for insurance fraud and misrepresentations, as much as $5,000 per each inappropriate opioid prescription for chronic pain. DFS investigation and administrative claims against opioid manufacturers and others remain ongoing.
“The damage of the opioid crisis is immeasurable and irreversible but New York’s resolution with Purdue Pharma moves justice in the right direction for New Yorkers who have endured this crisis,” DFS Superintendent Linda A. Lacewell said in the release. “Through ongoing investigations and administrative proceedings, DFS remains committed to holding opioid manufacturers and distributors accountable for their actions to protect consumers and shed light on the crisis’ effect on the health insurance system.”
Purdue Pharma did not immediately respond to a request for comment.
Source: New York State Department of Financial Services
Topics New York
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