Saskatchewan judge rejects proposed settlement between opioid patients, producer of OxyContin

A proposed national settlement capping a decade-long legal battle between the pharmaceutical giant whose pain pill triggered Canada’s deadly opioid epidemic and patients who were given the drug is in limbo.

A Saskatchewan court judge has rejected the settlement, saying the $18-million in compensation that Purdue Pharma, the maker of OxyContin, has agreed to pay is neither fair nor reasonable for the people who became addicted after their doctors prescribed it.

Justice Brian Barrington-Foote of Regina Court of Queen’s Bench also says in his judgment dated March 15 that the process followed to award an additional $2-million to the provinces and territories, which were also part of the lawsuit, was “rife with problems.”

The proposed settlement would reimburse the provinces for only a fraction of the hundreds of millions of dollars in health-care costs associated with addressing the opioid epidemic. In 2016 alone, the provinces’ public drug programs spent $125.3-million on medications to treat patients for opioid dependency, a 35-per-cent increase over two years, according to a report on drug spending published by the Canadian Institute for Health Information. The tally is for every province except Quebec.

Canada’s opioid epidemic traces its roots to 1996, with the introduction of OxyContin. The Public Health Agency of Canada released new statistics on Tuesday that show the crisis has worsened significantly in recent months. Between January and September of last year, 2,923 people across the country died of opioid-related overdoses, the agency said, an increase of 45 per cent from the same period in 2016.

Justice Barrington-Foote says he is not satisfied that the assumptions lawyers used to calculate the number of potential victims and the amount of damages were sound. He says lawyers estimated average compensation of $11,000 to $13,500 by dividing $20-million by the projected number of approved claimants. But that approach did not account for the $2-million earmarked for the provinces plus non-refundable expenses.

Courts in Ontario, Quebec and Nova Scotia last year approved the settlement, which is not an admission of liability from Purdue. But it also must be approved in Saskatchewan. The judge said lawyers for the patients can provide additional material to address his concerns or seek certification of their class-action lawsuit – the agreement was reached before the courts could hear an application for certification.

“We have not been able to determine what course we will take as we are reviewing the decision,” Halifax lawyer Ray Wagner told The Globe and Mail on Tuesday. “Anything and everything is on the table,” he said, when asked whether the lawyers for the patients will seek more compensation from Purdue.

Mr. Wagner’s law firm launched the lawsuit against Purdue in 2007 under class-actions legislation in Atlantic Canada and later joined forces with firms in Ontario and Saskatchewan representing people in the rest of the country.

The class-action accuses Purdue of knowing that anyone who took OxyContin would be at risk of becoming addicted and suffer withdrawal symptoms if they stopped. But at no time were these risks disclosed.

Ottawa and the provinces have not undertaken their own court action against Purdue. While the company based in Stamford, Conn., has acknowledged in the United States that its marketing of the drug was misleading, it has not made a similar admission in Canada.

Purdue marketed the drug as safer and less addictive than other opioids. Canada is now the world’s second-highest per capita user of prescription painkillers.

“We were encouraging the federal government to take a much more active role in dealing with the national health crisis that these opioids are causing,” Mr. Wagner said. However, he added, “there doesn’t seem to be an acceptable level of reaction.”

In light of the Saskatchewan judge’s ruling, British Columbia is considering what options are available to recover its health-care costs from Purdue, Lori Cascaden, a spokeswoman for the Ministry of Mental Health and Addictions, said in an e-mail on Tuesday.

Legislation allows provincial health insurers to recover costs for personal-injury accidents such as slips and falls, medical malpractice or manufacturing defects. The class-action lawyers were required by law to include a claim on their behalf, but the provinces were not obligated to agree with the settlement, legal experts said.

Justice Barrington-Foote says he is not satisfied that the provincial health insurers approved the proposed settlement in accordance with their legislation. He asks why no steps were taken to ensure that past and potential future health care costs for the provinces were identified.

The judgment also says class-action lawyers did not get a separate negotiating mandate from the provinces before reaching the proposed settlement.

Instead, Peter Lawless, a lawyer representing the British Columbia’s health insurer, acted as a liaison for all the provinces and territories in the negotiations with the class-action lawyers, the judgment says. Mr. Lawless advised the lawyers in an e-mail dated Jan. 10, 2017, that all 13 jurisdictions were “good to go” with the proposed settlement.