Judge Concludes Years of Legal Battles
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 struggle to hold the OxyContin-maker and the Sackler family accountable. It also unlocks long-delayed funds for people battling addiction. Purdue sought bankruptcy protection in 2019 after thousands of lawsuits accused the company of fuelling the opioid epidemic.
New Settlement Surpasses Earlier Offer
The agreement exceeds a previous deal by more than $1bn after the Supreme Court rejected the earlier version last year. Steve Miller, chairman of the Purdue board, said the settlement closes a long chapter and brings the case close to its final outcome. He said the plan unlocks billions in recoveries and includes important non-financial reforms.
Nonprofit Successor to Take Over Operations
The Sacklers must surrender ownership of the company. A nonprofit named Knoa Pharma will assume control and focus on addressing the opioid crisis. Purdue gained national recognition for producing and promoting OxyContin, a painkiller linked to the path toward heroin and other illegal drugs. The medication is blamed for worsening a crisis tied to about 900,000 US deaths since 1999.
Marketing Conduct at the Centre of Claims
Thousands of lawsuits accused Purdue and Sackler family members of aggressively marketing OxyContin 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.
High Court Rejects Sackler Liability Shield
A previous settlement would have protected the Sacklers from future civil lawsuits despite their decision not to file for bankruptcy. The Supreme Court ruled that such protections were not allowed under federal law. The new $7.4bn deal gives the Sacklers no immunity from future opioid-related claims. The family is expected to contribute between $6.5bn and $7bn and continues to deny wrongdoing.
Victims Set to Receive Direct Compensation
Some individuals argued that the settlement still 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 Target Treatment and Recovery Efforts
State and local governments will receive most of the settlement money. Many officials said the funds will support addiction treatment, prevention efforts, and recovery programmes across the country. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible delivers vital support to communities harmed by the crisis.
