Judge Ends Lengthy Legal Battle
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 decision concludes years of litigation aimed at holding the OxyContin-maker and its owners accountable. It also unlocks long-delayed funds for people struggling with addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the opioid epidemic.
Settlement Exceeds Previous Proposal
The new agreement increases the payout by more than $1bn compared with an earlier deal rejected by the Supreme Court last year. Purdue board chairman Steve Miller said the settlement closes a long chapter and brings the case near its final resolution. He added that the plan unlocks billions in recoveries and provides significant non-financial reforms.
Nonprofit to Take Over Purdue Pharma
The Sacklers must relinquish control of the company. A nonprofit named Knoa Pharma will take charge and focus on confronting the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller that often led users toward heroin and other dangerous drugs. The medication has been blamed for worsening a crisis linked to about 900,000 US deaths since 1999.
Lawsuits Target Aggressive Marketing Practices
Thousands of lawsuits alleged that Purdue and Sackler family members pushed OxyContin aggressively while hiding 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 cases filed by states, local governments, tribal nations, and other groups, which helped push the company into bankruptcy.
Supreme Court Blocks Sackler Immunity
A previous settlement attempted to shield the Sacklers from future civil lawsuits even though they did not file for bankruptcy. The Supreme Court ruled the 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.
Direct Payments Will Reach Victims
Some individuals argued earlier that the settlement still undercompensated victims. Individual victims may receive up to $865m. Despite objections, the plan won 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 Treatment and Prevention Nationwide
Most of the settlement money will go to state and local governments. Officials said the funding 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 responsible provides essential support to communities deeply affected by the crisis.
