3 states criticize $277 million opioid settlement 'side payment' to 9 states, D.C.
The objections may jeopardize the deal in which Purdue Pharma and the Sacklers will pay states and territories up to $6 billion to settle claims related to opioids
Josie Albertson-Grove And Mark Hayward
The New Hampshire Union Leader
MANCHESTER, N.H. — New Hampshire and eight other states that held out to force a larger payout from the makers of OxyContin are facing legal challenges from three states upset at the size of their share.
The objections are certain to slow and possibly jeopardize the agreement, which calls for Purdue Pharma and the Sackler family to pay states and territories between $5.5 billion and $6 billion over 18 years to settle claims related to the opioid crisis.
Late last week, three states — Florida, Indiana and West Virginia — filed formal objections in bankruptcy court to a $277 million set-aside payment earmarked for New Hampshire, eight other states and the District of Columbia.
New Hampshire Associate Attorney General James Boffetti portrayed the holdouts as committed states who believed that earlier agreements went too easy on the Sacklers. He said the remaining states fought twice to increase the initial settlement, which was for $3 billion, about half of the settlement announced last week.
"Half of the states — 25 states — said they were happy with $3 billion from the Sacklers," Boffetti said. He said Florida was among the states that wanted to settle early.
"They could have done exactly what we did. They could have said no," Boffetti said.
All states are now benefiting from the work of the holdouts, he said.
In filings, attorneys general from the three states called the fund an unfair "side deal" that does not take into account suffering in their states.
After commending the holdout states for extracting more from the company, Indiana argued that the extra money to the holdout states is unfair.
"Indiana cannot agree with the decision of the Nine to reward themselves for objecting to the confirmation order," reads that state's objection.
Calling the $277 million payment to holdout states a "slush fund," Indiana claims that court filings contain no explanation for how that amount was determined.
West Virginia, the state with the highest proportion of opioid deaths for the past several years, made similar arguments. West Virginia also said it was not clear how New Hampshire became involved in the mediation.
Making things more complicated, New Hampshire did not participate in person in the final round of negotiations. Some filings refer to a group of nine, which does not include the Granite State. But Boffetti said New Hampshire kept abreast of the talks, and the final settlement would not have been reached if it had not signed on.
Boffetti said the final amount wasn't reached until after three rounds of negotiations.
Twenty-five states first agreed to $3 billion, but the other half of the states didn't. Further negotiations pushed the settlement to $4.25 billion.
New Hampshire and the nine others continued to hold out. A bankruptcy judge tried to force the states to accept that amount, but they won a court challenge, Boffetti said.
The final round of negotiations led to the current agreement, which still must be approved by a judge.
If a judge approves the settlement, New Hampshire is set to receive $46 million over the next 18 years for addiction treatment and prevention programs.
Boffetti stressed that in agreeing to the deal, New Hampshire will drop the case it filed against Purdue and the Sacklers in state court.
"We brought a charge. All these other states never did that and agreed a long time ago to take a smaller amount," he said.
He said New Hampshire will file objections to the recent filings from Florida and the other two states. He said New Hampshire could exit the deal and press its case in court, but the objective at this point is to get money to the states.
Under the settlement, the Sacklers will not object to the disclosure of millions of records obtained and generated as part of the multi-state investigation.
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