Court Brings Long Dispute to an End
A bankruptcy judge approved a $7.4bn settlement on Friday that compels Purdue Pharma and its billionaire owners to pay for their role in the US opioid crisis. The ruling ends a long legal fight to hold the OxyContin-maker and the Sackler family responsible and releases long-delayed funds for people suffering from addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the nationwide opioid epidemic.
Settlement Surpasses Earlier Agreement
The new deal increases the payout by more than $1bn compared with a previous settlement blocked by the Supreme Court last year. Steve Miller, chairman of the Purdue board, 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 provides key non-financial benefits.
New Nonprofit Will Oversee Successor Company
The Sacklers must give up ownership of Purdue Pharma. A nonprofit named Knoa Pharma will take over and operate with a mission to confront the opioid crisis. Purdue became widely known for making and promoting OxyContin, a painkiller often linked to the path toward heroin and other drugs. The medication is blamed for worsening a crisis tied to roughly 900,000 US deaths since 1999.
Claims Target Aggressive Sales Tactics
Thousands of lawsuits accused Purdue and members of the Sackler family 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 resolve civil lawsuits filed by states, local governments, tribal nations, and other groups, which helped trigger the bankruptcy.
High Court Blocks Immunity for Sacklers
A previous settlement would have shielded the Sacklers from future civil lawsuits, despite their decision not to file for bankruptcy. The Supreme Court ruled such protections were unlawful. The new $7.4bn deal provides no immunity for future opioid-related claims. The family is expected to contribute between $6.5bn and $7bn and continues to deny wrongdoing.
Victims to Receive Compensation
Some individuals criticised the plan and argued that compensation levels remained too low. Individual victims may receive up to $865m. Despite concerns, the settlement received overwhelming support from government entities and personal injury claimants. Purdue said in October that more than 99% of creditors backed the restructuring plan.
Funds to Support Recovery Programmes
State and local governments will receive most of the settlement money. Officials said the funds will support addiction treatment, prevention efforts, and recovery programmes across the US. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers accountable delivers vital resources to communities deeply affected by the crisis.
