Judge Ends Prolonged Legal Fight
A bankruptcy judge approved a $7.4bn settlement on Friday that obliges 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 unlocks long-delayed funds for people struggling with addiction. Purdue sought bankruptcy protection in 2019 after thousands of lawsuits accused the company of driving the opioid epidemic.
Settlement Surpasses Previous Proposal
The new agreement raises the payout by more than $1bn compared with a settlement rejected by the Supreme Court last year. Steve Miller, chairman of the Purdue board, said the deal closes a long chapter and brings the case close to its final stage. He said the plan unlocks billions in recoveries and includes significant non-financial provisions.
Nonprofit Will Oversee Purdue Successor
The Sacklers must surrender ownership of the company. A nonprofit called Knoa Pharma will take charge 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 about 900,000 US deaths since 1999.
Claims Highlight Aggressive Sales Tactics
Thousands of lawsuits accused Purdue and Sackler family members of promoting 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 lawsuits filed by states, local governments, tribal nations, and other groups, which helped push the company into bankruptcy.
Supreme Court Blocks Immunity for Sacklers
A previous settlement attempted to shield the Sacklers from future civil lawsuits even though they never filed for bankruptcy. The Supreme Court ruled that such protections were not supported by law. The new $7.4bn agreement grants the family no immunity from future opioid-related claims. The Sacklers are expected to contribute between $6.5bn and $7bn and continue to deny wrongdoing.
Victims Set to Receive Direct Compensation
Some individuals argued earlier that the settlement still undercompensated victims. Individual victims may receive up to $865m. Despite concerns, the agreement 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 Support Treatment and Prevention
State and local governments will receive most of the settlement funds. Officials said the money will support addiction treatment, prevention programmes, and recovery services across the country. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible provides essential support to communities harmed by the crisis.
