Judge Ends Years of Legal Battles
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 for people struggling with addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of fueling the opioid epidemic.
Settlement Exceeds Previous Offer
The new deal increases payments by over $1bn compared with a prior settlement rejected by the Supreme Court last year. Steve Miller, Purdue board chairman, said the ruling closes a long chapter and moves the case close to its final resolution. He said the plan unlocks billions in recoveries and includes major non-financial reforms.
Nonprofit to Take Over Purdue Pharma
The Sacklers must relinquish control of the company. A nonprofit named Knoa Pharma will take over and focus on tackling 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 connected to around 900,000 US deaths since 1999.
Lawsuits Highlight Aggressive Marketing
Thousands of lawsuits accused Purdue and Sackler family members of pushing 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 lawsuits filed by states, local governments, tribal nations, and other groups, which contributed to the company’s bankruptcy.
Supreme Court Blocks Sackler Protection
A previous settlement sought to shield the Sacklers from future civil lawsuits, even though they never declared bankruptcy. The Supreme Court ruled such protections unlawful. 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 to Receive Direct Compensation
Some individuals argued earlier that the settlement underpaid victims. Individual victims may receive up to $865m. Despite concerns, the plan received 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 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 essential support to communities harmed by the crisis.
