Judge Ends Years of Litigation
A bankruptcy judge approved a $7.4bn settlement on Friday, requiring Purdue Pharma and the Sackler family to pay for their role in the US opioid crisis. The ruling ends years of legal battles to hold the OxyContin-maker and its owners accountable. It also releases long-delayed funds to help people struggling with addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of fueling the opioid epidemic.
Settlement Surpasses Previous Deal
The new agreement adds more than $1bn to an earlier settlement rejected by the Supreme Court last year. Steve Miller, Purdue board chairman, said the settlement closes a long chapter and brings the case near its final resolution. He said the plan unlocks billions in recoveries and includes significant non-financial reforms.
Nonprofit Will Take Control of Purdue
The Sacklers must relinquish ownership of the company. A nonprofit named Knoa Pharma will take over and focus on addressing the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller linked to a path toward heroin and other dangerous drugs. The medication is blamed for worsening a crisis tied to roughly 900,000 US deaths since 1999.
Aggressive Marketing Under Scrutiny
Thousands of lawsuits alleged that Purdue and Sackler family members promoted OxyContin aggressively 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 plea did not resolve civil cases filed by states, local governments, tribal nations, and other groups, which contributed to the company’s bankruptcy.
Supreme Court Blocks Sackler Protections
A previous settlement attempted to shield the Sacklers from future civil lawsuits, even though they never filed for bankruptcy. The Supreme Court ruled such protections unlawful. The new $7.4bn deal grants no immunity from future opioid-related claims. The Sacklers are expected to contribute between $6.5bn and $7bn and continue to deny wrongdoing.
Victims Will Receive Direct Payments
Some individuals argued earlier that the settlement undercompensated victims. Individual victims may receive up to $865m. Despite objections, the plan won overwhelming support from personal injury claimants and government groups. Purdue said in October that more than 99% of creditors approved the restructuring plan.
Funds Will Support Treatment and Prevention Nationwide
Most of the settlement money will go to state and local governments. Officials said the funds will support addiction treatment, prevention programmes, and recovery services across the US. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers accountable delivers vital support to communities harmed by the crisis.
