Judge Brings Prolonged Legal Fight to a Close
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 ends a long legal battle to hold the OxyContin-maker and the Sackler family 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 driving the opioid epidemic.
Agreement Exceeds Earlier Settlement Plan
The new deal increases the payout by more than $1bn compared with a previous settlement 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 near its conclusion. He said the restructuring plan unlocks billions in recoveries and includes important non-financial measures.
Nonprofit Will Replace Purdue Pharma
The Sackler family must give up ownership of the company. A nonprofit called Knoa Pharma will take control and focus on confronting the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller linked to the path toward heroin and other drugs. The medication is blamed for intensifying a crisis tied to roughly 900,000 US deaths since 1999.
Claims Focus on Aggressive Drug 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 agreement did not settle the many civil lawsuits from states, local governments, tribal nations, and other groups, which helped push the company into bankruptcy.
Supreme Court Blocks Sackler Immunity
A previous settlement would have shielded the Sacklers from future civil lawsuits even though they did not file for bankruptcy. The Supreme Court ruled that such protections lacked legal grounds. The new $7.4bn settlement offers no immunity from future opioid-related claims. The family is expected to contribute between $6.5bn and $7bn and continues to deny wrongdoing.
Compensation Funds Will Reach Victims
Some individuals argued earlier that the plan provided insufficient compensation. Individual victims could receive up to $865m. Despite objections, the settlement gained overwhelming support from government groups and personal injury claimants. Purdue said in October that more than 99% of creditors backed the restructuring plan.
States Plan to Expand Treatment and Prevention
State and local governments will receive most of the settlement funds. Many officials said the money will support addiction treatment, prevention programmes, and recovery services nationwide. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible delivers crucial support to communities harmed by the crisis.
