Settlement Ends a Long Legal Fight
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 ends years of legal battles aimed at holding the OxyContin-maker and its owners accountable. It also releases long-awaited funds for people facing addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of fuelling the opioid epidemic.
New Agreement Raises Payout
The deal adds more than $1bn to a previous settlement rejected by the Supreme Court last year. Purdue board chairman Steve Miller called the ruling a crucial milestone that moves the case close to its conclusion. He said the plan unlocks billions in recoveries and delivers important non-financial reforms.
Nonprofit Will Replace Purdue Ownership
The agreement forces the Sacklers to surrender 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 that often led users toward drugs like heroin. The medication has been blamed for intensifying a national crisis linked to about 900,000 US deaths since 1999.
Claims Focus on Aggressive Marketing
Thousands of lawsuits accused Purdue and members of the Sackler family of pushing OxyContin aggressively while hiding the drug’s addiction and overdose dangers. Purdue pleaded guilty in 2020 in a separate criminal case brought by the Department of Justice. But that plea did not settle the civil cases brought by state governments, local authorities, tribal nations, and others, which helped drive the firm into bankruptcy.
Supreme Court Blocks Sackler Protections
A previous deal would have shielded the Sacklers from future civil lawsuits, despite their decision not to file for bankruptcy. The Supreme Court ruled the 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 said the settlement still failed to compensate victims fully. Individual victims may receive up to $865m. Despite objections, the plan won overwhelming support from personal injury claimants and government groups. Purdue announced in October that more than 99% of creditors backed the restructuring.
States Plan to Boost Treatment Efforts
Most of the settlement money will go to state and local governments. Officials said the funding will support addiction treatment, prevention programmes, and long-term recovery services nationwide. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible provides vital support to communities harmed by the crisis.
