Judge Brings Years of Litigation to an End
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 fuelling the opioid epidemic.
Settlement Surpasses Earlier Proposal
The new agreement adds over $1bn to a previous settlement rejected by the Supreme Court last year. Steve Miller, Purdue board chairman, said the ruling closes a long chapter and brings the case close to its final resolution. He said the plan unlocks billions in recoveries and provides important non-financial reforms.
Nonprofit Will Take Control of Purdue
The Sacklers must surrender 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 the path toward heroin and other dangerous drugs. The medication is blamed for worsening a crisis tied to about 900,000 US deaths since 1999.
Lawsuits Focus on Aggressive Marketing
Thousands of lawsuits accused Purdue and Sackler family members of promoting 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 the many civil claims 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 sought to shield the Sacklers from future civil lawsuits even though they did not declare bankruptcy. The Supreme Court ruled those protections unlawful. The new $7.4bn agreement 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 the settlement still undercompensated victims. Individual victims may receive up to $865m. Despite objections, the plan received 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 Addiction Treatment 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 essential support to communities harmed by the crisis.
