Thank you, Judge Colleen McMahon

Pharmaceutical companies are a decidedly mixed bag of the good, the bad, and the ugly.

The good is that they, of course, produce drugs that make us healthier and sometimes even save our lives. So thank you, Pfizer, Moderna, et al. for coming up with the covid vaccines.

The ugly is the price gouging, the chokehold they have on Congress that gets in the way of things like negotiated Medicare drug costs, and a reasonable price for drugs like insulin. (Americans pay about eight times as much for insulin as Canadians do.) The drug company defense is always that they need to invest a lot of money in R&D. Which is true. Except how does it happen that drug costs are so much higher in The States than any other comparable country? And then there's the fact the drugmakers spend a ton more - I've heard more than an order of magnitude - on marketing than they do on R&D. So there's that.

Then there's the bad, which is the behavior exhibited by Purdue Pharma, and its owners the Sackler family, over the years when they were knowingly and deliberately getting people hooked on OxyContin. (This was spectacularly chronicled by journalist Patrick Radden Keefe in his book Empire of Pain. And which I wrote less spectacularly about in a post last June.) 

And now we can circle back to the good:

A federal judge rejected OxyContin maker Purdue Pharma’s bankruptcy settlement of thousands of lawsuits over the opioid epidemic Thursday because of a provision that would protect members of the Sackler family from facing litigationof their own.

U.S. District Judge Colleen McMahon in New York found that federal bankruptcy law does not give the bankruptcy judge who had accepted the plan the authority to grant that kind of release for people who are not declaring bankruptcy themselves. (Source: Boston Globe)

Thank you, Judge McMahon. You ruled good!

To many, the settlement was plenty rich, worth $10B, of which $4.5B was to be ponied up by the Sacklers. But then you run the numbers, and find that, with 500,000 Oxy-related deaths in the U.S. to date, it works out to about $20K per capita. Not that all those deaths can be blamed on the Sacklers. But still. $20K?

Plus the settlement protected the Sacklers and their fortunes from being touched by law suits, of which there are over 800 pending. (I'm not the only one who's happy this settlement has been tossed. Imagine what a smile there'd be on your face if you were one of the hundreds going after them.)  

The Sackler family, for all its philanthropy (med schools, museums), has been plenty shady. 

In a hearing, McMahon focused in on how Sackler family members transferred $10.4 billion from the privately held Stamford, Connecticut-based company over the decade before the bankruptcy. McMahon wanted to know whether the money was moved in part to ensure a role for the Sacklers in bankruptcy negotiations.

But that wasn't the basis for McMahon's ruling, which asked the question "whether the bankruptcy law even allows for the kind of deal the company and its creditors struck if there are objections to it." Which there were. 

In any event, the ruling has been welcomed by plenty of folks, including a string of state AG's.

Connecticut Attorney General William Tong, who was among a handful of state officials seeking to have the deal undone, called the ruling “a seismic victory for justice and accountability.” Tong said the ruling will “re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused.”

Needless to say, the ruling will be appealed, and will probably make it up to the Supreme Court. 

Who knows how this edition will rule. I haven't looked to see what the Federalist Society, the puppeteers for the current SCOTUS majority, have had to say about cases like this, but this Court is certainly difficult to trust.

Anyway, for now the Sacklers are sweating. To them this ruling no doubt looks bad and ugly. But me, I see it as a good thing. A very good thing.

Thank you, Judge Colleen McMahon.