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Wisconsin would receive $65 million in proposed settlement with OxyContin manufacturer
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PURDUE PHARMA | BANKRUPTCY PROCEEDING

Wisconsin would receive $65 million in proposed settlement with OxyContin manufacturer

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Josh Kaul

Kaul

Wisconsin would receive around $65 million as part of a proposed $4.3 billion settlement agreement that Attorney General Josh Kaul and officials in 14 other states have reached with the Sackler family and their company, opioid manufacturer Purdue Pharma, for prevention and recovery efforts.

The proposed agreement, still subject to a bankruptcy court’s approval, would also require the company to be wound down or sold by 2024 and for the Sackler family’s foundations to be handed over to an independent trustee to be used to address the opioid epidemic.

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The $65 million that would be directed to Wisconsin if the proposed deal is approved represents about 1.76% of the funds available to the states for distribution from the bankruptcy proceeding. Under the agreement, the Sacklers would pay out the $4.3 billion over the next nine years.

Thousands of individual victims would also be paid as part of the bankruptcy process.

The Sacklers would also be permanently banned from the opioid business and would relinquish control of family foundations holding $175 million in assets to the trustees of a foundation dedicated to addressing the opioid crisis.

Wisconsin filed suit against Purdue Pharma and the company’s former president and chairman, Richard Sackler, in 2019, alleging that the company falsely advertised and misled the public about the dangers of the drug.

Later in 2019, Purdue Pharma reached a tentative $3 billion settlement with 22 state attorneys general and hundreds of cities and counties that filed suits against the company, but Wisconsin wasn’t a part of it. At the time, Kaul said the deal didn’t achieve justice.

On Thursday, he said the new proposal is an improvement.

“It’s critical that we hold those responsible for the opioid epidemic accountable,” Kaul said in a statement. “No lawsuit can undo the destruction the opioid epidemic has caused. But by recovering funds from those whose unlawful conduct led to the opioid crisis, we can support prevention, treatment, and recovery programs and deter the kind of conduct that led to the epidemic.”

Release of documents

One of the new concessions Purdue Pharma and the Sacklers are making beyond the increase to $4.3 billion in payments is agreeing to release more than 30 million documents, including attorney-client privileged communications about the original FDA approval of OxyContin and tactics to promote opioids.

Purdue Pharma would also turn over for public disclosure the evidence from lawsuits and investigations of the company over the past 20 years, as well as hundreds of thousands of confidential communications with its lawyers about tactics for promoting opioids, FDA approval of OxyContin, pharmacies diverting drugs, doctors unnecessarily prescribing opioids and the billions of dollars Purdue paid out to the Sacklers.

In an interview, Kaul said a bill recently signed by Gov. Tony Evers that the governor said would speed disbursement of settlement money with opioid manufacturers won’t apply to the proposed settlement reached with Purdue Pharma and the Sacklers.

Law’s stipulations

Under the law, which Evers signed Wednesday despite saying it was partially unconstitutional, the state must work with counties on settlements to lawsuits they have filed separately against opioid manufacturers and distributors. The law requires 70% of any settlement to go to local governments and 30% to the state. And all of the money would have to be spent on opioid abuse, no other government programs.

Evers said he believed the law’s requirement the Republican-controlled Legislature’s budget committee sign off on any settlement is an unconstitutional violation of the separation of powers.

The law refers to a requirement in laws passed in a lame-duck session in late 2018 requiring settlements entered into by the state Department of Justice to receive legislative approval. According to a DOJ statement, those requirements don’t apply because the proposed resolution is part of a bankruptcy proceeding and is not a “compromise or discontinuance of a civil action” subject to budget committee approval.

Kaul also said the proposed agreement doesn’t meet the conditions that would trigger the application of the bill Evers just signed.

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