Policy News Roundup: January 30, 2025

Sacklers and Purdue reach new settlement

Purdue/the Sacklers have reached a new settlement agreement with negotiating states to resolve the opioid litigation. The settlement totals $7.4 billion.

Reminder: The Supreme Court struck down an earlier deal last summer. The justices ruled that because the Sacklers themselves had not declared bankruptcy (unlike Purdue), they could not receive immunity from future prosecution related to opioids.

• That had been a central demand from the Sacklers in settlement negotiations, and Purdue, the Sacklers and those suing them had to go back to the drawing board.

The details:

• Purdue’s payment: Purdue would pay $897 million immediately.
• Sacklers out at Purdue: Like under the previous agreement, members of the Sackler family would give up ownership of Purdue. The company would become a new entity with its board appointed by states and others who sued the company.
• Increased $ from the Sacklers: Under the new agreement, the Sacklers would pay up to $6.5 billion over 15 years, up from $6 billion over 18 years under the original agreement. The Sacklers would pay nearly $3 billion in the first three years, with remaining payments over an additional 12 years.
• More $ to families: The new settlement will pay $800-850 million to victims of the opioid crisis or their survivors, up from up to $750 million in the previous agreement.
• Legal defense fund for the Sacklers: The Sacklers would not receive total immunity from future opioid lawsuits, as the court ruled that impermissible. Instead, the new agreement protects the Sacklers from lawsuits only from entities that agree to the settlement and requires those entities to set aside as much as $800 million for the Sacklers’ defense against future cases.

But: How many claimants will agree to the new terms is unclear.

What’s coming:

• Fifteen states involved in talks were on board, but now the deal has to be sold to all the claimants, including the remaining states, thousands of local governments, some 140,000 victims and hundreds of Native American tribes.
• If the plan is approved by claimants, the U.S. Trustee (the Department of Justice’s arm that oversees the bankruptcy system) and a federal bankruptcy judge, Purdue would emerge by the end of this year from bankruptcy.
• At that point, most of the lawsuits would end. Purdue would get protection from future lawsuits related to opioids, as part of the standard bankruptcy process, but the Sacklers would not.
• Governments and victims who don’t agree to the settlement would be allowed to pursue lawsuits against the Sacklers, and a handful of states, counties, cities and individuals have already threatened new lawsuits.

A note: Bankruptcy court was not designed to address public health issues, and it was never going to appropriately hold the Sacklers accountable for their actions. It is difficult to get “justice” on this issue, but this is one of the few opioid settlements with money directly for victims, and it would provide some needed funding to states/localities to address the opioid crisis.

Source: Sacklers Up Their Offer to Settle Purdue Opioids Cases, With a New Condition (The New York Times); Purdue Pharma and owners to pay $7.4 billion in settlement to lawsuits over the toll of OxyContin (Associated Press); Purdue Pharma owners strike new $6.5 billion deal in opioid case (The Washington Post)

President Trump took several actions in his first days in office that are impacting health care and health agencies.

Executive Order Rescinds: Trump rescinded executive orders that Biden implemented to promote Affordable Care Act (ACA) enrollment, access and affordability.

Why it’s important:

• These moves signal the Trump administration’s willingness to make major changes to Medicaid and the ACA that could increase the number of uninsured Americans and weaken safety-net protections for low-income people. Insurance coverage is critical for addiction treatment.
• But: The initial orders will have little immediate impact, and the direction Trump aims to steer the U.S. health care system is still unclear. Trump’s picks to lead federal health agencies have yet to win Senate confirmation.

Regulatory Freeze: Trump signed an executive order freezing ongoing regulatory work across the federal government, a move designed to give his administration an opportunity to reconsider rules close to being proposed or completed.

• Any rules sent to the Federal Register that have not yet been published are to be withdrawn for review. Any rule recently published that has not yet taken effect will have its effective date delayed 60 days.

Why it’s important:

• Rules that could be impacted include recent proposed rules to limit the nicotine content in cigarettes and other tobacco products and on the prescribing of controlled substances via telehealth.
• Trump’s team can also choose not to enforce certain rules or to not defend Biden-era rules being challenged in court. One early test for the new administration will be whether to fight a lawsuit filed last week against the Biden administration’s rules to bolster parity requirements.

External Communications/Meetings Freeze: The Trump administration also instructed federal health agencies to pause all external communications, such as health advisories, weekly scientific reports, updates to websites and social media posts. The administration also abruptly cancelled many meetings across health agencies.

• The communications pause extends through February 1. It is unclear if the meeting cancellations are related or on the same timeline.

The response: Some familiar with the matter acknowledged that they expected some review during a presidential transition but said they were confused by the pause’s scope and indeterminate length. The administration defended the holds as part of the presidential transition and said it had provided flexibility for urgent communications.

Why it’s important:

• The pause on communications includes the Centers for Disease Control and Prevention’s (CDC) Morbidity and Mortality Weekly Review reports, data updates to CDC’s website and public health data releases from the National Center for Health Statistics, which tracks health trends including overdose deaths.
• Several meetings of National Institutes of Health study sections, which review applications for fellowships and grants, were cancelled without being rescheduled.

President Trump signed an executive order on his first day in office to designate drug cartels as foreign terrorist organizations.

The details:

• The order requires the Secretary of State, along with other Cabinet secretaries, to make a recommendation within 14 days regarding which groups should be designated as Foreign Terrorist Organizations or Specially Designated Global Terrorists. This is a process that generally takes months.
• The order could give the administration more power to impose economic penalties, travel restrictions and potentially even take military action inside foreign nations.

Why it’s important: Trump has indicated he wants to declare certain Mexican cartels as foreign terrorist organizations as a way to apply maximum pressure on the country to rein in its drug trade.

• But: Analysts say the U.S. government already has many of the same tools available for use against cartels.
• Prosecutions could ensnare low-level dealers: It is against the law for people in the U.S. to knowingly provide support to an organization labeled as a terrorist group. Given the drug distribution system, the action could potentially ensnare low, street-level sellers and buyers whose connections to the cartel are tenuous (and many of whom, we know, have substance use disorder). The charge of supporting terrorism carries up to a 20-year sentence and in some cases life in prison if the support results in death. It is not clear what this would mean for dealers in the U.S. whose customers die from overdoses.
• There could be increased violence: Many have voiced concern that the designation could provide the U.S. justification to take military action against cartels (which Trump has threatened), leading to war and more organized attacks on Americans. Drug cartels have historically not carried out politically motivated attacks on Americans or American interests, but the designation could change that.
• It would strain relations with Mexico: Fracturing the relationship between the U.S. and Mexico could have significant economic repercussions. Mexico could respond by ending its efforts to help control unlawful migration into the U.S. and further complicate immigration from countries where the cartels operate.

The larger context:

• The State Department typically gives the terrorist label to groups with ideological objectives, while drug cartels and gangs have financial motivations.
• Trump sought to slap the designation on cartels during his first term but was ultimately dissuaded by Mexican officials who pledged to cooperate with the U.S. on fighting them.
• Trump also declared an emergency at the southern border and signed related executive orders, repeatedly highlighting the threat of cartels and opioids coming through the border. He also promised tariffs on Mexico and Canada for their involvement in the drug trade.

The main point: Punitive and supply-side measures will not solve the opioid crisis. A public health approach focused on prevention, harm reduction and treatment is also needed.

Source: Trump seeks to designate drug cartels as foreign terrorist organizations (Associated Press); Trump’s health orders (Politico); How Trump’s Plan to Label Some Drug Cartels ‘Terrorists’ Would Work (The New York Times)