Judge Brings Lengthy Dispute to an End
A bankruptcy judge approved a $7.4bn settlement on Friday that requires Purdue Pharma and its billionaire owners to pay for their role in the US opioid crisis. The ruling concludes a long legal effort to hold the OxyContin-maker and the Sackler family accountable. It also releases long-delayed funds for people battling addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the opioid epidemic.
New Agreement Goes Beyond Previous Deal
The settlement adds more than $1bn to an earlier proposal 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 final outcome. He said the plan unlocks billions in recoveries and introduces key non-financial reforms.
Nonprofit Will Operate Purdue’s Successor
The Sacklers must give up ownership of the company. A nonprofit named Knoa Pharma will take control 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 associated with around 900,000 US deaths since 1999.
Marketing Practices at the Heart of Legal Claims
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 settle the many civil claims filed by states, local governments, tribal nations, and other groups, which helped drive the company into bankruptcy.
Supreme Court Blocks Liability Shield for Sacklers
A previous settlement sought to protect the Sacklers from future civil lawsuits even though they never declared bankruptcy. The Supreme Court ruled that such protections had no legal foundation. The new $7.4bn deal offers 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 during earlier hearings that the settlement still fell short in compensating victims. Individual victims may receive up to $865m. Despite concerns, the agreement secured overwhelming support from government groups and personal injury claimants. Purdue said in October that more than 99% of creditors approved the restructuring plan.
Funds Will Support Recovery Efforts Nationwide
State and local governments will receive most of the settlement funds. Officials said the money will support addiction treatment, prevention programmes, and recovery services across the country. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible provides crucial support to communities deeply affected by the crisis.
