The latest on the Purdue Pharma and Sackler family opioid settlement

Summary

Summary of Marketplace Morning Report: The Latest on the Purdue Pharma and Sackler Family Opioid Settlement
Release Date: January 24, 2025

The Marketplace Morning Report, hosted by David Brancaccio, delivers concise and insightful coverage of current business and economic news. In this episode, released on January 24, 2025, the focus centers on the significant opioid settlement involving Purdue Pharma and the Sackler family, the rise in mortgage rates, and the evolving landscape of online privacy laws across various states.

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1. Purdue Pharma and Sackler Family Opioid Settlement

The episode opens with a detailed discussion on the newly proposed opioid settlement between Purdue Pharma, the Sackler family, and various states impacted by the opioid crisis.

• Settlement Breakdown: Nancy Marshall Genzer explains that the total settlement amounts to $7.4 billion. The majority of the funds, up to $6.5 billion, will be contributed by the Sackler family over 15 years, while Purdue Pharma is set to pay approximately $900 million (00:19).

  "Most of the money from the settlement will come from the Sackler family. They'll pay up to $6.5 billion over 15 years. Purdue Pharma will pay almost $900 million."
  — Nancy Marshall Genzer (00:19)

• Allegations Against Purdue Pharma: The settlement addresses the "deceptive marketing" practices of OxyContin. Pennsylvania's Attorney General accused Purdue Pharma of misleading doctors about the addiction risks associated with OxyContin. Additionally, New York's Attorney General highlighted the Sackler family's critical role in exacerbating the opioid epidemic.

  "Purdue has been accused of telling doctors there was very little risk of patients getting addicted to it."
  — Nancy Marshall Genzer (00:36)

• Settlement Finalization and Implications: While the settlement is a significant step forward, it awaits approval from a U.S. bankruptcy court. Upon approval, the Sackler family will lose control over Purdue Pharma, which will then be overseen by a court monitor, effectively halting its ability to market or sell opioids in the U.S.

  "This deal does not protect the Sackler family from future lawsuits."
  — Nancy Marshall Genzer (01:01)

  Purdue Pharma expressed satisfaction with the agreement, emphasizing its role in compensating victims and mitigating the opioid crisis.

  "Purdue told me it's extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis and save lives."
  — Nancy Marshall Genzer (01:01)

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2. Rising Mortgage Rates and Economic Implications

Transitioning to the housing market, the discussion highlights the notable increase in mortgage rates and its broader economic impact.

• Current Mortgage Rates: As of the report, the average 30-year fixed-rate mortgage has surged to 7.12%, a significant rise from the low 6% seen in September of the previous year (01:46).

  "The average 30 year fixed rate mortgage rate is up at 7.12%, according to Mortgage News Daily's calculation."
  — David Brancaccio (01:46)

• Economic Analysis by Christopher Lowe: Chief Economist at FHN Financial, Christopher Lowe, provides insight into the factors driving long-term interest rates upward. He emphasizes that while the Federal Reserve controls overnight rates, long-term rates are influenced by inflation expectations, wage pressures, and labor market dynamics.

  "I think we're going to see long term interest rates continue to go up no matter what the Fed does."
  — Christopher Lowe (02:06)

  Lowe points to the closure of the southern border and the resulting labor shortages as key contributors to rising wages, which in turn fuel long-term interest rates.

  "If we can't find more people, wage pressures are going to start to rise."
  — Christopher Lowe (02:30)

• Market Performance: The discussion briefly touches on stock market movements, noting that despite the S&P closing at a record high the previous day, the Dow experienced a slight decline, while the Nasdaq saw marginal gains.

  "After the S and P closed at a record high yesterday, it's up just 5 points at the moment. The Dow is down 148 points 3.10%. The Nasdaq is up 2/10 of 1%."
  — David Brancaccio (03:05)

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3. State-Level Online Privacy Protections and AI Regulation

The latter portion of the episode delves into the burgeoning state-level legislation aimed at enhancing online privacy protections, particularly for minors, and the broader implications for technology and privacy.

• New Privacy Laws: Several states including New Hampshire, Nebraska, Delaware, Iowa, and New Jersey have enacted laws to safeguard residents' personal data from data brokers and enforce stricter data protection measures for businesses.

  "Several states enacted laws trying to protect residents information from things like data brokers and also place stricter rules on how businesses protect the personal data of the people who live in the state."
  — Ray Brescia (05:03)

• Content Access Regulations: States like Florida, South Carolina, and Tennessee have introduced laws requiring age verification for accessing certain online content. This move aims to restrict minors from accessing adult content but has also led to unintended consequences.

  "Florida, South Carolina, and Tennessee all had laws start in January that require age verification to sites with a certain amount of adult content."
  — Ray Brescia (06:15)

• Supreme Court Involvement: The Texas law mandating online age verification has escalated to the Supreme Court in the case Free Speech Coalition v. Paxton. Opponents argue that these laws infringe upon First Amendment rights.

  "That case is called Free Speech Coalition v. Paxton. And groups... are hoping to convince the court that these age verification laws [are] invasive and that they violate the First Amendment right to free speech."
  — Ray Brescia (06:59)

• Consumer Response: In response to the new regulations, there has been a significant increase in the use of Virtual Private Networks (VPNs), with Florida experiencing a surge in demand by approximately 1000% as individuals seek to bypass restrictions.

  "After the law kicked in in Florida, demand for VPNs, virtual private networks that let you appear like you're in another state surged by about a thousand percent."
  — Ray Brescia (06:46)

• Future Outlook: Ray Brescia anticipates that these state-level initiatives may catalyze a push for a comprehensive national privacy law, with the tech industry likely advocating for a unified baseline.

  "I think that what we're likely to see from it is a greater push at the national level for a national privacy law."
  — Ray Brescia (05:32)

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Conclusion

This episode of the Marketplace Morning Report provides a thorough examination of pivotal issues impacting the business and economic landscape. From the substantial opioid settlement involving Purdue Pharma and the Sackler family to the rising mortgage rates influenced by labor market dynamics, and the intricate state-level legislation shaping online privacy and content access, the report offers listeners a comprehensive overview of current trends and their implications.

For more detailed insights and future updates, listeners are encouraged to tune into subsequent episodes of the Marketplace Morning Report.

Transcript

[David Brancaccio]

A new opioid proposed settlement. I'm David Brancaccio. A reconfigured $7.4 billion settlement with states has been reached with Purdue Pharma and its Sackler family owners over the opioid crisis. Marketplace's Nancy Marshall Genzer joins us now. Nancy?

[Nancy Marshall Genzer]

Well, David, most of the money from the settlement will come from the Sackler family. They'll pay up to $6.5 billion over 15 years. Purdue Pharma will pay almost 900 million.

[David Brancaccio]

Do this is about the promotion of the highly addictive painkiller OxyContin?

[Nancy Marshall Genzer]

Yeah. Pennsylvania's Attorney general says the opioid crisis was fueled by what he called the deceptive marketing of OxyContin. Purdue has been accused of telling doctors there was very little risk of patients getting addicted to it. The New York attorney general says the Sackler family quote, played a critical role in starting and fueling the opioid epidemic.

[David Brancaccio]

So is this thing final, the settlement?

[Nancy Marshall Genzer]

No. It still has to be approved by a U.S. bankruptcy court. Assuming it is, the Sacklers will no longer control Purdue Pharma. They won't be allowed to sell opioids in the U.S. purdue will still be overseen by a court monitor and it won't be able to lobby or market opioids. In an emailed statement, Purdue told me it's extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis and save lives. This deal does not protect the Sackler family from future lawsuits. Unlike a previous settlement that was overturned by the Supreme Court last year. At that time, the court said the Sacklers were not entitled to a blanket shield from liability.

[David Brancaccio]

Okay. The average 30 year fixed rate mortgage rate is up at 7.12%, according to Mortgage News Daily's calculation. That is far from the low sixes we saw last September. On Fridays we check in with Christopher Lowe. He's chief economist at FHN Financial in New York. Chris, mortgage rates are really long term interest rates.

[Christopher Lowe]

I think we're going to see long term interest rates continue to go up no matter what the Fed does. Because the Fed controls overnight interest rates. They are still talking about the possibility of cutting those rates. But long term interest rates are determined by all kinds of factors. Inflation expectations, wage pressures and so forth. And it's wages that I think are really central to what's happening to long term rates. Because we have closed the southern border. Last year, 80% of working age population growth was immigrants. We're creating jobs at a pace of 200,000amonth and that could accelerate if the economy picks up. Question is, where do we get the workers from? And if we can't find more people, wage pressures are going to start to rise.

[David Brancaccio]

Economist Chris Low Thanks. After the S and P closed at a record high yesterday, it's up just 5 points at the moment. The Dow is down 148 points 3. 10%. The Nasdaq is up 2/10 of 1%.

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[Kai]

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[David Brancaccio]

A lot of the rules regarding our online privacy protections for kids in the digital world or guardrails for artificial intelligence are determined by which state you live in this as Congress struggles to respond nationally to rapid changes in technology, the tech industry may have a bigger voice for itself in Washington if early indications in this new administration play out. Let's bring in our senior Washington correspondent Kimberly Adams with our Sabri Benishour for a dive into this gang.

[Kimberly Adams]

So some new laws kicked in this year in a few states related to online privacy. What kind of changes are we seeing at the state level?

[Ray Brescia]

So several states enacted laws trying to protect residents information from things like data brokers and also place stricter rules on how businesses protect the personal data of the people who live in the state. So we saw laws like this kick in at the start of the year in New Hampshire, Nebraska, Delaware, Iowa and New Jersey. And a few more are going to be coming later this year. Ray Brescia teaches at Albany Law School and he just put out a book, the Private Is Political Democracy in the Age of Surveillance Capitalism.

[Unnamed Expert]

It's a slow drumbeat of states starting to consider ways to protect citizens rights and it's a very interesting development and I think that what we're likely to see from it is a greater push at the national level for a national privacy law.

[Ray Brescia]

And Brescia expects that that push is going to increasingly start coming from the tech industry, looking for at least a national baseline.

[Kimberly Adams]

These are designed to protect privacy of people. But at the same time, a few states have new laws that restrict or regulate what content residents can access online.

[Ray Brescia]

Exactly. Florida, South Carolina, and Tennessee all had laws start in January that require age verification to sites with a certain amount of adult content. And that makes more than a dozen states nationwide that make people wanting to access these sites prove their age in some way. Now, of course, people are finding ways around it. Business Insider reports that after the law kicked in in Florida, demand for VPNs, virtual private networks that let you appear like you're in another state surged by about a thousand percent.

[Kimberly Adams]

Because people may not always want to be on record as visiting XYZ site.

[Ray Brescia]

Exactly. They want to hide their identity.

[Kimberly Adams]

Now, one of these laws that you're talking about is actually at the Supreme Court right now. What can you tell us about that?

[Ray Brescia]

Yeah, I mean, opponents have been suing to block many of these laws at the state level, but Texas's law, which began in 2023, has made it all the way to the Supreme Court. That case is called Free Speech Coalition v. Paxton. And groups representing adult entertainment industry businesses, plus some civil rights groups, are hoping to convince the court that these age verification laws invasive and that they violate the First Amendment right to free speech. And the arguments in that case have already begun.

[Emily]

All right.

[Kimberly Adams]

Marketplace's senior Washington correspondent, Kimberly Adams. Thank you so much.

[Ray Brescia]

You're welcome.

[David Brancaccio]

It is the Marketplace morning report from APM American Public Media.

[Emily]

Hi, this is Emily from Paxton, Nebraska. I live in a rural area where the written local news has been outsourced to a bigger city and the local newscast is not very good. I enjoy listening to Marketplace programs because they are informative and thought provoking. I learn about things, places and people that I would not have found anywhere else. I am so grateful for Marketplace's dedication to bringing the news to the people. Join me in supporting Marketplace with a gift today. Go to marketplace.org donate and thank you.