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Money from Purdue Pharma settlement won't come to Iowa counties any time soon

Money from Purdue Pharma settlement won't come to Iowa counties any time soon

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Hancock County Supervisors voted to accept the terms of a Purdue Pharma proposed settlement plan this week, but County Attorney Blake Norman said county coffers are not expected to see an influx of dollars any time soon.

That will be the case for all the counties in North Iowa that joined in the class action lawsuit against the Oxycontin maker.

In December 2020, Hancock County, and then Winnebago County supervisors, joined many counties across Iowa and the nation in signing papers to join class-action litigation seeking damages from a long list of opioid manufacturers, distributors, and chain pharmacies/dispensers. The legal action stems from opioid epidemics that have adversely impacted counties, cities, and services in Iowa and across the United States.

Opioid Crisis-Purdue Bankruptcy

In an agreement disclosed late Wednesday in a filing in U.S. Bankruptcy Court in White Plains, N.Y., more than a dozen states have dropped their objections to OxyContin maker Purdue Pharma’s reorganization plan, edging the company closer to resolving its bankruptcy case. In this Oct. 21, 2020, file photo, Purdue Pharma headquarters stands in Stamford, Conn. 

In November 2019, Cerro Gordo County opted out of joining the suit.

At the time, County Attorney Carlyle Dalen acknowledged that the opioid crisis has been "a big topic throughout our country" but also mentioned that staying in any one class-action case could exclude the county from other benefits.

“We are just one of thousands of litigants,” Norman said. “This is very large, like big tobacco suits and asbestos, too, would be similar, but this proposed settlement pertains to just one of many pharmaceutical companies and this fifth version of this particular settlement could be rejected by a federal judge. There could be more versions.”

Both Mitchell and Worth counties also signed on to the suit in 2018, encouraged by the Iowa State Association of Counties.

Hancock's Norman noted there is no specific dollar amount or even percentage for any county attached to the proposed settlement. He said Iowa will probably see less than 1 percent of the division of funds and that counsel for participating Iowa counties will work closely with Iowa Attorney General Tom Miller and his team for the determination of any future allocations.

“There is nothing written in stone that Hancock County will receive X percentage of X amount,” Norman said. “There is not much going on yet. This is a proposed settlement plan that may or may not go forward. I’m sure we’ll be able to get some dollars sometime. We may have more things to bring before the board of supervisors over the next few years.”

Meanwhile, a plan from Purdue Pharma to reorganize into a new entity that helps combat the nation’s opioid epidemic got a big boost this week as 15 states -- including Iowa -- suing the company now support the new business model.

Iowa attorney general Tom Miller

Miller

The agreement from multiple state attorneys general, including those who had most aggressively opposed maker Purdue Phama’s original proposal, was disclosed late Wednesday in a filing in U.S. Bankruptcy Court in White Plains, N.Y. It followed weeks of intense mediation that resulted in changes to Purdue's original plan.

Iowa Attorney General Tom Miller said resolving the lawsuit against Purdue and its Sackler family owners will require the Sacklers to pay more than $4.3 billion for prevention, treatment and recovery efforts across the country.

“No settlement could ever be enough to make up for the misconduct by the Sacklers and the company,” the Democratic attorney general said in a statement “This agreement is in the best interests of Iowans, however, and will go a long way toward abating the opioid crisis the defendants helped create.”

The Sacklers would pay $4.325 billion over the next nine years as part of the agreement. Exact funding distributions are yet to be determined, but Iowa expects to receive an estimated $25 million for abatement of the opioid epidemic, according to Miller’s office. Thousands of individual victims of Purdue’s misconduct also will receive compensation as part of the bankruptcy process.

In May 2019, Iowa sued Purdue Pharma and its former president and board chairman, Richard Sackler, alleging that the drug company engaged in unfair, deceptive and unlawful practices in the marketing of OxyContin. The lawsuit alleged that Purdue officials repeatedly made false and deceptive claims that OxyContin was safe and suitable for a wide range of pain patients.

Purdue filed for bankruptcy protection after Iowa and other states filed similar suits.

The company's latest plan also calls for members of the Sackler family to give up ownership of the Connecticut-based company as part of a sweeping deal it says could be worth $10 billion over time. That includes the value of overdose-reversal drugs the company is planning to produce.

Most groups representing various creditors, including victims and local governments, had grudgingly supported the plan. But state attorneys general until now were divided.

The support from additional states comes less than two weeks before a deadline to object formally to Purdue's reorganization plan and about a month before a hearing on whether it should be accepted.

With just nine states and the District of Columbia remaining opposed to the plan, it makes it more likely the federal bankruptcy judge will confirm the deal.

Rod Boshart from The Gazette Des Moines Bureau contributed to this report.

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