In its suit, Oklahoma sought $25billion in damages and penalties over Purdue's push to lure doctorsinto prescribing Oxycontin for unauthorized uses to generatebillions in profits. (Photo: Shutterstock)

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Purdue Pharma LP and the Sackler family will pay $270 million tosettle the state of Oklahoma's claims that illegal marketing of theOxycontin painkiller devastated local communities, the first accordin a wave of lawsuits faced by the drugmaker.

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The settlement comes two months before the scheduled start of atrial against Purdue Pharma, Johnson & Johnson and TevaPharmaceutical Industries Ltd. in Norman, Oklahoma. Details of theagreement are scheduled to be announced by the state laterTuesday.

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Related: Opinion: The opioid crisis makes us allpoorer

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Oklahoma claims the three opioid makers understated the risks ofprescription painkillers and overstated their benefits, fueling anepidemic that's costing its communities tens of millions of dollarsfor treatment and policing. The companies and others are alsobattling claims by three dozen states and 1,600 U.S. cities andcounties, but those suits are pending in another court and thefirst trial isn't until the fall.

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Still, Purdue's settlement could help set the terms for otherjurisdictions and companies looking to resolve the opioidlitigation.

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In its suit, Oklahoma sought $25 billion in damages andpenalties over Purdue's push to lure doctors into prescribingOxycontin for unauthorized uses to generate billions in profits forthe company. While doctors have wide discretion to prescribemedicines beyond what they've been approved to treat, drugmakersare limited to marketing their products for just ailments approvedby regulators.

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The Sackler family, which owns the drugmaker, is accused ofmaking billions over the abuse of Oxycontin that the company'smarketing allegedly fueled. The family made more than $4 billionbetween 2008 and 2016, according to a recently unsealed opioid suitfiled by the Massachusetts Attorney General.

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The settlement will allow Stamford, Connecticut-based Purdue toavoid filing for bankruptcy at least for now, according to peoplefamiliar with the matter, who declined to speak publicly about thedeal because they weren't authorized to do so. Craig Landau,Purdue's chief executive officer, confirmed in a March 8 interviewwith the Washington Post that “bankruptcy is an option” to dealwith the wave of opioid suits that threaten the pharmaceuticalcompany's financial strength.

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A Chapter 11 filing would shield Purdue from litigation byimposing a stay on all U.S. suits and allow the privately helddrugmaker to consolidate its legal costs and expenses. Experts saytaking the cases out of the regular court system and putting thembefore a single bankruptcy judge likely will allow Purdue to payless in settlements.

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The agreement in Oklahoma is the first in a group of opioidlawsuits against Purdue. More than a decade ago, West Virginiasettled a case against Purdue over its marketing of Oxycontin,which came on the U.S. market in 1996.

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Lawyers for Oklahoma and Purdue have been in talks for months,according to the people. The settlement negotiations were overseenby a court-appointed mediator. Judge Thad Balkman refused requestsby Purdue, J&J and Teva to delay the May 28 trial. On Monday,the state's Supreme Court upheld Balkman's decision to push aheadwith the trial, making Oklahoma the first state in the nation totry claims against opioid makers.

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In 2016, there were 444 opioid-related overdose deaths inOklahoma, which left it ranked 28th in the U.S. for such deaths,according to data analyzed by the Centers for Disease Control andPrevention. The year before, the number of opioid prescriptionsOklahoma doctors wrote exceeded the state's population of fourmillion, according to government statistics.

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The state's suit sought millions in damages for the currentcosts of dealing with the opioid epidemic and billions in futurecosts tied to counseling, health-care and social services forchildren orphaned by overdoses, according to court filings inOklahoma's case.

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The case is State of Oklahoma v Purdue Pharma LP, No.ZCJ-2017-816, Oklahoma District Court for Cleveland County(Norman).

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Read more about the fall of PurduePharma: 

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