Judge Concludes Years of Litigation
A bankruptcy judge approved a $7.4bn settlement on Friday, requiring Purdue Pharma and its billionaire owners to pay for their role in the US opioid crisis. The ruling ends a long-running legal battle to hold the OxyContin-maker and the Sackler family accountable. It also releases long-delayed funds meant to support people struggling with addiction. Purdue sought bankruptcy protection in 2019 after thousands of lawsuits accused the company of fuelling the opioid epidemic.
New Deal Exceeds Earlier Offer
The agreement adds more than $1bn to a previous proposal rejected by the Supreme Court last year. Steve Miller, chairman of the Purdue board, said the settlement closes a lengthy chapter and brings the case close to its final stages. He said the plan unlocks billions in recoveries and includes crucial non-financial reforms.
Nonprofit Will Manage Purdue’s Successor
Under the deal, the Sacklers must relinquish ownership. A nonprofit named Knoa Pharma will take over and focus on confronting the opioid crisis. Purdue became widely known for manufacturing and promoting OxyContin, a painkiller linked to a path toward heroin and other dangerous drugs. The medication is blamed for worsening a crisis associated with around 900,000 US deaths since 1999.
Legal Claims Target Purdue Marketing
Thousands of lawsuits argued that Purdue and Sackler family members pushed 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 settle the many civil cases filed by states, local governments, tribal nations, and other groups, which helped drive the company into bankruptcy.
Supreme Court Rejects Sackler Protection
A previous settlement attempted to give the Sacklers protection from future civil lawsuits even though they never declared bankruptcy. The Supreme Court ruled that such protections lacked legal basis. The new $7.4bn agreement offers no shield from future opioid-related claims. The Sacklers are expected to contribute between $6.5bn and $7bn and continue to deny wrongdoing.
Direct Payments Will Reach Victims
Some individuals argued earlier that the settlement still fell short in compensating victims. Individual victims may receive up to $865m. Despite concerns, the agreement won overwhelming support from government groups and personal injury claimants. Purdue said in October that more than 99% of creditors approved the restructuring plan.
Funding Will Strengthen Recovery Efforts
Most settlement funds will go to state and local governments. Officials said the money will support addiction treatment, prevention programmes, and recovery services across the US. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible provides vital assistance to communities damaged by the crisis.
