OxyContin maker to appeal judge's decision to reject $20M Canadian settlement

A Saskatchewan judge's concerns about the real costs of addiction recovery halted a settlement agreement between Purdue Pharma and hundreds of people who were prescribed OxyContin.

Saskatchewan judge expressed concern that amount was insufficient

Purdue Pharma, the manufacturer of OxyContin, intends to appeal a Saskatchewan judge's decision that halts the $20-million class-action settlement it reached in Canada. (Darren McCollester/Getty Images)

Purdue Pharma, the manufacturer of OxyContin, intends to appeal a Saskatchewan judge's recent decision not to approve a $20-million class-action settlement with Canadians who became addicted to the prescription drug and their families, CBC News has learned.  

The notice, filed at the Court of Appeal for Saskatchewan in Regina on Monday, provided few details but said representatives for Purdue Pharma and affiliates planned to return to court on July 11 to apply for "leave to appeal the order of the Honourable Mr. Justice [Brian] Barrington-Foote arising from his reasons dating March 15, 2018."

In that March 15 judgment, Barrington-Foote said he was "not yet satisfied" that the settlement agreement for hundreds of plaintiffs across the country was "fair, reasonable" or in their "best interests" — the legal requirements that must be met for a class-action settlement to be approved.  

The judge's doubts stemmed from two main issues: whether or not the provinces and territories had properly signed off on the terms of the final settlement; and whether or not the agreed-upon amount of compensation took into account the real costs of treatment, rehabilitation and loss of income for the people who had developed opioid addiction.

Barrington-Foote invited the class-action lawyers to return with additional information to address those concerns and try again to have the settlement approved. 

In light of that, Purdue Pharma's stated intention to appeal suggests the company wants to preserve the existing terms of the settlement, said Matthew Herder, director of the Health Law Institute at Dalhousie University in Halifax.

Matthew Herder, director of Dalhousie University's Health Law Institute, says the judge's concerns about the settlement show 'how imperfect this solution is.' (Submitted by Matthew Herder)

"I think it suggests an interest on Purdue's part in shoring up this proposed settlement as quickly as possible, in order to try to stave off other possible actions, whether reopening settlement negotiations and/or the other options potentially available to provincial, territorial and federal governments," Herder said in an email to CBC News. 

Courts in Nova Scotia, Ontario and Quebec had already approved the class-action settlement, but Saskatchewan's approval is also required for it to proceed. 

Under the terms of the settlement, Purdue makes no admission of liability. 

The agreement requires Purdue to pay $18 million to all eligible claimants, which the class-action lawyers estimated to be somewhere between 1,475 and 1,770 people, though that number has yet to be finalized. They estimated each approved claimant would be compensated an average of $11,000 to $13,500, including legal fees. 

Purdue would also pay $2 million total to the 13 provincial and territorial health insurers for health care provided to those covered by the settlement. 

Because of the way class-action law works, the provinces and territories would then be unable to pursue further legal action against Purdue Pharma in the future.  

"That's a big trade-off to think about," said Herder. 

Addiction a 'lifelong' battle

Dr. Hakique Virani, a public health specialist at the University of Alberta and addiction physician at an Edmonton clinic, said Barrington-Foote's concerns over the compensation amount are valid. 

"It's very, very common for me to see in my practice, and for my colleagues to see, that people who had very promising careers may have had an injury, [were] prescribed an opioid, and the medication got away on them," Virani told CBC News. 

Recovery from addiction, including therapy, is often a 'lifelong' battle, says Edmonton addiction specialist Dr. Hakique Virani. (CBC)

In addition to lost income as a result of job loss from addiction, some people require intense residential addiction treatment that can cost tens of thousands of dollars, he said. 

Recovery from addiction, including therapy, is often a "lifelong" battle, he added.  

"And that, you know, takes time away from other things that they might otherwise have been doing, whether financially productive or productive socially in terms of engagement with family and parenting and that sort of thing," Virani said. 

"I don't know how you assign a number to all of those things, but, you know, I think in the judge's remarks ... he made comparisons to other conditions, for example pain conditions, that may have been associated with addiction that were multiple times more than the settlement per person in this class," he said.

A "decent estimate," Virani said, would be "that it's in the hundreds of thousands of dollars, if not millions of dollars, the cost to an individual and their family when they're diagnosed with an addiction." 

'Imperfect' solution

The fact that the Saskatchewan judge left the door open for the class-action lawyers to address his concerns rather than reject the settlement outright reflects a "level of sympathy and understanding for the individual plaintiffs involved," said Herder. 

"I think he's trying to balance a sort of a very pragmatic, humane desire to try and do something, however imperfect, for these individual folks that have been affected by the opioid epidemic, with at the same time a real commitment to highlighting how imperfect this solution is."

All of us would have wanted to resolve the case with Purdue for a much higher sum.- Joel Rochon, lawyer

One member of the class-action counsel team, Toronto-based lawyer Joel Rochon, said a settlement could never solve the "horrible" opioid crisis Canada is facing. 

"This class action was designed to provide compensation to a limited number of eligible claimants who were prescribed OxyContin," he said.   

"All of us would have wanted to resolve the case with Purdue for a much higher sum," he said, but the settlement would provide a reasonable amount of money clients could use immediately, without facing years of potential litigation. 

Government legal action?

Herder said the "pause" in the settlement caused by Barrington-Foote's decision provides an opportunity for the provincial, territorial and federal governments "to think seriously about what else might be done."

In response to an inquiry from CBC News, the press secretary for federal Health Minister Ginette Petitpas Taylor said, "We are exploring all options to address this [opioid] crisis and we are looking at ways to strengthen industry transparency and accountability."  

Herder said the federal government can try to prosecute Purdue Pharma under Canada's Food and Drugs Act for the way it marketed OxyContin.

In the U.S., the company acknowledged in 2007 that its promotions exaggerated the drug's safety and minimized the risks of addiction. It agreed to pay more than $600 million US in penalties.

But Purdue Pharma has made no admission of liability in Canada. In a statement to CBC Radio's The Current the company said, "Purdue Pharma (Canada) has always marketed its products in line with the Health Canada-approved product monograph and in compliance with all relevant rules, regulations and codes, including the Food and Drugs Act." 

Even if such a prosecution were successful, it wouldn't generate much money because the penalties under the Food and Drugs Act were relatively low prior to 2014.

But there is still a "symbolic value" in the Canadian government taking that level of action, Herder said. 

"It really depends on what your goal is. If it's about compensating survivors, prosecution under the Food and Drugs Act doesn't make sense," he said. "But if some of this, for some of those survivors, is about actually identifying wrongdoing and changing marketing practices so as to mitigate these kinds of disasters in the future, then prosecution, you know, holds some water."

About the Author

Nicole Ireland

Nicole Ireland is a CBC News journalist with a special interest in health and social justice stories. Based in Toronto, she has lived and worked in Thunder Bay, Ont.; Iqaluit, Nunavut; and Beirut, Lebanon.

With files from The Associated Press and CBC Radio's The Current