Judge Concludes Long 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 ruling ends years of litigation aimed at holding 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 Tops Previous Offer
The new deal increases the payout by more than $1bn compared with a prior settlement rejected by the Supreme Court last year. Steve Miller, Purdue board chairman, said the agreement closes a long chapter and brings the case close to its final resolution. He said the plan unlocks billions in recoveries and includes major non-financial reforms.
Nonprofit Will Take Control of Purdue
The Sacklers must give up ownership of the company. A nonprofit called Knoa Pharma will take over 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 tied to roughly 900,000 US deaths since 1999.
Marketing Practices Under Scrutiny
Thousands of lawsuits alleged 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 claims filed by states, local governments, tribal nations, and other groups, which helped push the company into bankruptcy.
Supreme Court Blocks Sackler Legal Shield
A previous settlement attempted to shield the Sacklers from future civil lawsuits even though they never filed for bankruptcy. The Supreme Court ruled such protections unlawful. The new $7.4bn agreement 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 still undercompensated victims. Individual victims may receive up to $865m. Despite objections, 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 Expand Treatment and Prevention Programs
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 nationwide. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers accountable provides crucial support to communities harmed by the crisis.
