Judge Ends Lengthy Legal Fight
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 closes a long legal struggle to hold the makers of OxyContin and the Sackler family accountable and releases long-delayed funds for people battling addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the nationwide opioid epidemic.
Settlement Grows Beyond Earlier Offer
The new agreement increases the payout by more than $1bn compared with a previous deal rejected by the Supreme Court last year. Steve Miller, chairman of the Purdue board, said the settlement closes a long chapter and brings the case close to its final page. He added that the plan unlocks billions in recoveries and delivers key non-monetary benefits.
Nonprofit Successor Will Replace Purdue Pharma
The Sacklers must give up ownership of the company. A nonprofit named Knoa Pharma will take over and operate with a mission to confront the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller often linked to the path toward heroin and other drugs. The medication is blamed for intensifying a deadly public health disaster tied to about 900,000 US deaths since 1999.
Lawsuits Accuse Purdue of Misleading Promotion
Thousands of lawsuits accused Purdue and members of the Sackler family of pushing OxyContin aggressively while misleading doctors and patients about addiction and overdose dangers. Purdue pleaded guilty in 2020 in a separate criminal case brought by the Department of Justice. That agreement did not resolve the many civil lawsuits filed by states, local governments, tribal nations, and other groups, which helped force the company into bankruptcy.
High Court Blocked Earlier Sackler Shield
A previous settlement would have protected the Sacklers from future civil lawsuits despite their decision not to declare bankruptcy. The Supreme Court ruled that such protections were not allowed under federal law. The new $7.4bn settlement 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 Set To Receive Compensation
Some individuals criticised the plan during earlier hearings and argued that compensation for victims remained insufficient. Individual victims may receive up to $865m. Despite objections, the settlement received overwhelming support from government entities and personal injury claimants. Purdue said in October that more than 99% of creditors voted for the restructuring plan.
Funds Will Support Treatment and Prevention
State and local governments will receive the majority of the settlement funds. Many 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 accountable delivers crucial support to communities deeply affected by the crisis.
