Judge Brings Long Legal Battle to a Close
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 litigation 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 Exceeds Earlier Proposal
The new agreement increases payments by over $1bn compared with a previous settlement rejected by the Supreme Court last year. Purdue board chairman Steve Miller 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 critical non-financial reforms.
Nonprofit Will Take Over Purdue Operations
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 has been blamed for intensifying a crisis connected to roughly 900,000 US deaths since 1999.
Aggressive Marketing Under Scrutiny
Thousands of lawsuits claimed 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 helped push the company into bankruptcy.
Supreme Court Blocks Sackler Protections
A prior settlement sought to shield the Sacklers from future civil lawsuits, despite their choice not to declare 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 to Receive Direct Compensation
Some individuals argued earlier that 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.
Settlement Funds Will Support 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 crucial support to communities harmed by the crisis.
