A bankruptcy judge has approved a $7.4 billion settlement involving Purdue Pharma and the Sackler family. This landmark deal holds the company accountable for its role in the ongoing opioid crisis in the United States.
Purdue Pharma’s Bankruptcy and Settlement Overview
Purdue Pharma filed for bankruptcy protection in 2019 amid a barrage of lawsuits accusing the opioid manufacturer of exacerbating the addiction epidemic. The settlement finalized recently is a significant increase from a prior agreement that the U.S. Supreme Court rejected last year.
Details of the Settlement
- Total Amount: $7.4 billion
- Amount contributed by the Sackler family: Between $6.5 billion and $7 billion
- Direct compensation for individual victims: Up to $865 million
The restructuring plan prevents the Sacklers from retaining ownership of Purdue, allowing a nonprofit organization named Knoa Pharma to take over. This entity aims to be “purpose-driven” in addressing the opioid crisis going forward.
Impact of the Opioid Crisis
OxyContin, developed and heavily marketed by Purdue, has been linked to 900,000 deaths in the U.S. since 1999. The drug has served as a gateway for many to more dangerous substances like heroin.
Legal Proceedings and Accusations
Purdue Pharma and the Sackler family faced numerous allegations for aggressively promoting OxyContin while downplaying its addiction risks. In 2020, Purdue pleaded guilty to charges brought by the Department of Justice. However, this plea did not resolve the civil lawsuits from various governmental entities.
In a shift from previous settlements, the latest agreement does not give the Sacklers immunity from future lawsuits related to the opioid epidemic. The U.S. Supreme Court had ruled against a previous deal that would have shielded them from such legal challenges.
Support for the Settlement
The recent agreement has gained support from over 99% of creditors involved, with government officials and personal injury victims signing off. Many have expressed optimism that the funds will be utilized for addiction treatment and prevention efforts nationwide.
California Attorney General Rob Bonta emphasized the importance of this accountability, saying it fulfills a critical need for funding treatment and prevention resources for those affected by the crisis.
