Judge Ends Years of Legal Struggles
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 concludes years of litigation aimed at holding the OxyContin-maker and its owners accountable. It also releases long-delayed funds to support people struggling with addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of fueling the opioid epidemic.
Settlement Surpasses Previous Proposal
The new deal adds more than $1bn to a prior 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 provides important non-financial reforms.
Nonprofit to Take Control of Purdue
The Sacklers must give up ownership of the company. A nonprofit named 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 intensifying a crisis tied to roughly 900,000 US deaths since 1999.
Aggressive Marketing at the Center of Lawsuits
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 cases filed by states, local governments, tribal nations, and other groups, which helped drive the company into bankruptcy.
Supreme Court Blocks Sackler Legal Shield
A previous settlement attempted to protect the Sacklers from future civil lawsuits, even though they did not 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 Payments
Some individuals argued earlier that the settlement undercompensated victims. Individual victims may receive up to $865m. Despite objections, the plan gained 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 Strengthen Treatment and Prevention
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 delivers essential support to communities harmed by the crisis.
