Judge Ends Years of Litigation
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 legal battles 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 fuelling the opioid epidemic.
Settlement Exceeds Previous Offer
The new deal adds more than $1bn to an earlier settlement rejected by the Supreme Court last year. Steve Miller, Purdue board chairman, said the ruling closes a long chapter and brings the case near its final resolution. He said the plan unlocks billions in recoveries and includes major non-financial reforms.
Nonprofit Will Take Over Purdue
The Sacklers must give up control 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 the path toward heroin and other dangerous drugs. The medication has been blamed for worsening a crisis tied 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 cases filed by states, local governments, tribal nations, and other groups, which helped drive the company into bankruptcy.
Supreme Court Blocks Sackler Protections
A previous settlement sought to shield the Sacklers from future civil lawsuits despite their choice not to declare bankruptcy. The Supreme Court ruled those 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 Will Receive Direct Compensation
Some individuals argued earlier that the settlement still fell short for 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 Nationwide Recovery Efforts
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 vital support to communities harmed by the crisis.
