Judge Brings Long Legal Saga To A Close
A bankruptcy judge approved a $7.4bn settlement on Friday that forces Purdue Pharma and its billionaire owners to pay for their role in the US opioid crisis. The ruling concludes a long legal struggle to hold the makers of OxyContin and the Sackler family accountable. It also releases long-delayed funds for people suffering from addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the opioid epidemic.
New Deal Exceeds Previous Offer
The settlement increases the payout by more than $1bn compared with a deal the Supreme Court rejected last year. Steve Miller, chairman of the Purdue board, said the agreement closes a long chapter and brings the case near its final resolution. He said the restructuring plan unlocks billions in recoveries and includes major non-financial benefits.
Nonprofit Successor Will Take Control
The Sackler family must surrender ownership of the company. A nonprofit called Knoa Pharma will take over and operate with a mission to confront the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller often linked to the path toward heroin and other illicit drugs. The medication is blamed for worsening a deadly crisis that has contributed to about 900,000 US deaths since 1999.
Marketing Practices Face Heavy Scrutiny
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 deal did not resolve the many civil lawsuits filed by states, local governments, tribal nations, and other groups, which helped drive the bankruptcy.
Court Rejects Sackler Liability Shield
A previous settlement would have protected the Sacklers from future civil lawsuits, even though they never declared bankruptcy. The Supreme Court ruled such protections unlawful. The new $7.4bn deal grants 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 Receive Direct Compensation
Some individuals criticised the new plan and said victim payments remained too low. Individual victims could receive up to $865m. Despite objections, the settlement gained strong support from government entities and personal injury claimants. Purdue said in October that more than 99% of creditors backed the restructuring plan.
Settlement Funds Aim To Aid Communities
State and local governments will receive most of the settlement money. Many officials said the funds will support addiction treatment, prevention efforts, and recovery services nationwide. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers accountable brings vital support to communities harmed by the crisis.
