Litigation and the Opioid Crisis: Purdue’s US Settlement in the Canadian Legal Context

Contributed by Dylan Yan

Introduction

On November 24, 2020, the manufacturers of OxyContin, Purdue Pharmaceuticals, settled on a guilty plea with United States (US) federal prosecutors for their role in the opioid epidemic. They pled guilty to charges of conspiracy to defraud the US, violation of federal healthcare reimbursement laws, and sale of opioids to doctors they suspected of writing illegal prescriptions. The guilty plea provides for over 8 billion USD in forfeitures, which could bring the company’s cost from opioid litigation to as much as 12 billion USD.

The settlement has already prompted consideration from the Canadian legal community as to how the American settlements could affect recent analogous class-action lawsuits launched in Canada. This article aims to examine the Purdue settlement’s potential impact on opioid litigation in Canada by outlining the history of the epidemic, analyzing the American proceedings, and applying their lessons to the Canadian legal context.

Overview of the Opioid Epidemic

Prescribed as a treatment for chronic pain, opioid medications like OxyContin, Vicodin, and Percocet saw their popularity skyrocket in the 1990s in Canada and the US. This was primarily due to aggressive marketing by pharmaceutical companies like Purdue. While prescriptions have decreased since 2017 with intervention from the American federal government and the Centre for Disease Control, the US and Canada remain the highest-ranking countries worldwide in terms of opioid prescriptions.

Opioids have been responsible for almost 450,000 deaths since 1999 in the United States. In a year, roughly 3,000 Canadians and 65,000 Americans die from opioid-associated poisoning. While the crisis affects people of all ages and backgrounds, those at highest risk are within Black and Hispanic communities, as well as young adult men.

In 2016, Canada’s Minister of Health declared the opioid crisis a public health emergency, putting the epidemic at the forefront of government oversight, funding and legislative reform. The US Department of Health and Human Services followed suit in 2017.


Prescribed as a treatment for chronic pain, opioid medications like OxyContin, Vicodin, and Percocet saw their popularity skyrocket in the 1990s in Canada and the US. || (Source: Wikimedia Commons // Psiĥedelisto)

Oxycontin Profits and Purdue

Between 2008 and 2018, OxyContin accounted for over 28% of the American opioid market, grossing over 35 billion USD since its FDA approval in 1996. The Sacklers family, owners of Purdue Pharmaceuticals, have accumulated over 10.7 billion dollars in personal wealth due to OxyContin sales.

Documents obtained during the American lawsuits, including personal emails from the Sacklers, indicate that Purdue understood the dangers of OxyContin and aimed to mislead medical professionals and the North American public. As a company executive in 2001, Dr. Richard Sackler wrote an email outlining a plan to shift the blame for OxyContin-related deaths away from Purdue onto opioid abusers.

Purdue Pharmaceutical Litigation in the United States

The recent settlement concludes a drawn-out litigation process for Purdue Pharmaceuticals.

The agreement covers over 2,400 individual lawsuits proceeding by way of multidistrict litigation, a civil procedure mechanism in the US that combines lawsuits into one cohesive hearing. For cases with common questions of fact, a judicial panel transfers pretrial proceedings from multiple municipalities into one federal district court. After determining the facts, the case is sent back to the original court for trial. Parties may also settle in multidistrict litigation, which resolves all the individual lawsuits.

Although the settlement contains over 8 billion USD in penalties, only about three billion dollars will be paid directly by the Sacklers family. The remaining fines are an estimate of what will be recouped from Purdue Pharmaceutical’s bankruptcy proceedings: the company will be placed in a “public benefit trust” which will oversee the dissemination of Purdue’s resources to combat the opioid crisis. Over the next decade, Purdue Pharmaceuticals will continue to manufacture OxyContin and overdose treatment medications, using the profits from the drugs to pay its debtors and fund opioid interventions like addiction treatment clinics. 

The settlement has also created public controversy. Critics of the settlement opine the lack of criminal convictions for the Sacklers and the low fines relative to the family’s pharmaceutical fortune. Steven Miller, chairman of Purdue Pharmaceuticals, voiced his support for the settlement in the Wall Street Journal. Miller labelled the agreement a “real long-term solution” in procedural justice, noting that it expedited access to Purdue’s monetary resources.


Over the next decade, Purdue Pharmaceuticals will continue to manufacture OxyContin and overdose treatment medications, using the profits from the drugs to pay its debtors and fund opioid interventions like addiction treatment clinics. || (Source: pxhere // Mohamed Hassan )

Purdue Pharmaceutical Lawsuits in Canada

Multidistrict litigation does not exist in Canadian law. As an alternative, most Canadian lawsuits against Purdue are proceeding by way of class action, in which a single lawsuit is filed on behalf of a group of wronged individuals. Unlike multidistrict proceedings in the US, which bring together many lawsuits in a single forum for efficiency purposes, class-action lawsuits aim to provide justice for this “class” of harmed persons.

In 2018, the provincial government of British Columbia launched a class-action lawsuit against multiple opioid manufacturers including Purdue, alleging that pharmaceutical companies deceptively marketed opioid products, and were aware of the dangers they present to public health. Class action lawsuits against Purdue Pharmaceuticals have since been launched in every Canadian province except Manitoba. The Manitoban government plans to join the lawsuit within the next year, pending approval of provincial legislation expanding class-action capabilities. Altogether, the provinces seek to recover 67 billion USD in damages. Most of these class-action lawsuits have yet to be certified, meaning that a judge must grant procedural approval for the lawsuit to proceed in this specific legal process.

Understanding the United States Settlement in Canadian Litigation Context

Purdue’s Canadian opioid litigation has been temporarily stayed as a result of its bankruptcy filing in the US. Initially, this motion was granted to prevent Canadian cases from draining Purdue’s funds, as the bankrupt company will not be able to pay all of its Canadian and American debtors. Now, a significant portion of the American settlement will get paid out before Canadian litigation resolves, leaving fewer of Purdue’s resources available to plaintiffs in Canada.

Canadian litigators understand that Purdue, having already declared bankruptcy, does not possess sufficient resources to pay even half of the 67 billion in charges. In Canada and the US, recovering the full amount of the opioid crisis is impossible – Americans recouped 13 billion USD in settlements from an epidemic that cost the country over 2.5 trillion dollars over the past four years alone. Similarly, a potential Canadian settlement would recover only a fraction of the proposed damages. However, Canadian class-action proceedings provide greater leverage than American multidistrict litigation.


In Canada and the US, recovering the full amount of the opioid crisis is impossible – Americans recouped 13 billion USD in settlements from an epidemic that cost the country over 2.5 trillion dollars over the past four years alone. || (Source: Pixabay // Matvevna)

In terms of representation, Canadian class-action lawyers are better incentivized to pursue their client’s interests than their US multidistrict counterparts. American judges appoint the plaintiff’s legal representative in multidistrict litigation, and can be influenced by personal factors, including friendship and professional familiarity. Thus, multidistrict litigation in the US is fraught with “repeat players” – lawyers who are incentivized to curry favour with judges and adopt group-think practices instead of best serving their client’s interests. In Canada, the initial plaintiffs who file the class-action lawsuit have the right to choose their representation. Furthermore, lawyers’ fees are calculated as a percentage of the plaintiff’s awards, which encourages class-action representatives to pursue the highest monetary return for their clients.

In terms of judicial oversight, class-actions also afford Canadians greater protection than American multidistrict proceedings. US judges in a multidistrict lawsuit are selected in a “fact-intensive” process, without any clear regulations, and are not statutorily required to inspect the fairness of any settlement agreements that result from the proceedings. By contrast, Canadian class-actions appoint specialized judges for case-management and require judicial approval of fairness in any proposed settlement.

Conclusion

Opioid litigation against Purdue Pharmaceuticals in Canada is in its early stages – Manitoba has yet to join the other provinces in the proceedings, and the class-action lawsuits still require certification. Any potential class-action settlement would only recoup a fraction of the proposed 67 billion USD in damages. However, Canadians can leverage a more favourable legal process – both in representation and judicial oversight – than American multidistrict litigants. Hopefully, these proceedings will provide justice for the victims of Purdue Pharmaceuticals and the opioid crisis.

Dylan Yan is a Junior Online Editor for the McGill Journal of Law and Health. Dylan is a recent transfer BCL/JD student at McGill University’s Faculty of Law.

Previously, Dylan studied law at Osgoode Hall Law School, where he was awarded the Ivan Cleveland Rand Prize and the Samuel Rubinoff Prize for Legal Research and Writing. During his time at Osgoode, Dylan was a student caseworker for Mahdi Weinstock LLP and Community Legal Aid Service Providers, focusing on immigration and refugee practice.

Dylan also attended McGill’s Faculty of Science, in which he holds a bachelor’s degree in Microbiology and Immunology and the J.W. McConnell Entrance Scholarship. During his undergraduate studies, Dylan conducted research as part of the Lady Davis Institute. His efforts there focused on HIV enzymes, characterizing the effects of HIV drugs in order to optimize combination HIV therapies.