Judge Ends Lengthy Legal Battle
A bankruptcy judge approved a settlement on Friday that forces Purdue Pharma and its billionaire owners to pay $7.4bn. The decision ends a long legal fight to hold the OxyContin-maker and the Sackler family accountable and releases long-delayed funds for people struggling with addiction. Purdue sought bankruptcy protection in 2019 after thousands of lawsuits accused the company of fuelling the US opioid crisis.
Settlement Increases Payout Significantly
The new settlement raises the payment by more than $1bn compared with an earlier deal rejected by the Supreme Court last year. Steve Miller, chairman of the Purdue board, said the agreement closes a long chapter and brings the case close to its end. He said the restructuring plan unlocks billions in recoveries and important non-monetary benefits.
New Nonprofit Will Replace Purdue Pharma
The Sacklers must give up ownership of the company. A nonprofit called Knoa Pharma will take control and operate with a mission to address the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller that often acted as a gateway to heroin and other drugs. The medication is blamed for accelerating a deadly crisis linked to about 900,000 US deaths since 1999.
Lawsuits Targeted Aggressive Marketing
Thousands of lawsuits accused Purdue and Sackler family members of aggressively promoting OxyContin while misleading doctors and patients about addiction and overdose risks. Purdue pleaded guilty in 2020 in a separate criminal case brought by the Department of Justice. That agreement did not resolve civil lawsuits filed by states, local governments, tribal nations, and other groups, which helped trigger the bankruptcy.
Supreme Court Rejected Earlier Sackler Protections
A previous settlement would have shielded the Sacklers from future civil lawsuits, even though they did not declare bankruptcy. The Supreme Court ruled such protections were not allowed under the law. The new $7.4bn agreement gives the Sacklers no immunity from future opioid-related claims. The family is expected to contribute between $6.5bn and $7bn and continues to deny wrongdoing.
Victims Will Receive Direct Payments
Some individuals criticised the plan earlier and argued that victim compensation remained insufficient. Individual victims could receive up to $865m. Still, the settlement won overwhelming backing from government groups and personal injury claimants. Purdue said in October that more than 99% of creditors supported the restructuring plan.
Funds Aim To Support Treatment Nationwide
State and local governments will receive most of the settlement money. Many officials said the deal will support opioid treatment, prevention, and recovery services across the country. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers accountable brings vital funding to communities deeply harmed by the crisis.
