Members of the Sackler family, who are behind Purdue Pharma—the maker of OxyContin—have reached a new settlement agreement amounting to as much as $7.4 billion to resolve lawsuits regarding the devastating effects of the opioid crisis. This announcement was made by several state attorneys general on Thursday.
Under the terms of this recent agreement, the Sacklers are set to contribute up to $6.5 billion while relinquishing control of the company, which will additionally pay nearly $900 million. This updated settlement offers $500 million more than the previous deal, which was rejected by the U.S. Supreme Court last year.
This settlement is significant as it ranks among the largest financial resolutions linked to the multitude of lawsuits filed by local and state governments, as well as Native American tribes, aiming to hold pharmaceutical companies accountable for the ongoing opioid epidemic. Alongside the Purdue settlement, other agreements reported in recent years total roughly $50 billion, with most funds dedicated to addressing and alleviating the crisis.
Although court approval is still required for this deal and some specifics remain to be finalized, it reflects a shift in the federal government’s stance; previously, a federal arm had opposed the last settlement even after every state had agreed to it, leading to intervention at the Supreme Court level. However, under the current administration, it is unlikely that there will be similar opposition.
Purdue Pharma issued a statement expressing satisfaction with the new agreement, noting that it will provide substantial financial resources aimed at compensating victims, mitigating the opioid crisis, and funding essential treatments and overdose rescue medications. Meanwhile, representatives of the Sackler family did not respond immediately to requests for comments regarding the deal.
Kara Trainor, a Michigan resident who has been in recovery for 17 years, shared her story of addiction stemming from a prescription for OxyContin given 23 years ago to treat a back injury. She welcomed the new settlement, highlighting the pervasive influence of a company that prioritized profits over human lives. New York Attorney General Letitia James also commented that while no monetary amount could undo the damage caused, this significant influx of funds would help communities in their healing process.
The coalition of attorneys general involved in negotiating the deal includes representatives from California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and West Virginia. However, not every state has signed on; for instance, Washington’s Attorney General’s office stated they are still assessing the new agreement.
In line with previous proposals, the Sackler family will also give up ownership of Purdue Pharma. The family members had already resigned from the board and have not profited from the company since its bankruptcy proceedings began. The newly structured Purdue Pharma will operate under a board appointed by the states and other litigants. Victims of the opioid crisis and their families could also receive between $800 million and $850 million from the settlement, a feature uncommon in similar cases. Additionally, the settlement includes provisions for up to $800 million allocated for future litigation against the Sackler family if needed.
Last year, the previous settlement was blocked by the Supreme Court due to clauses that shielded Sackler family members from civil lawsuits despite their non-bankrupt status. In this new agreement, protections for the family are limited only to those entities that choose to accept the settlement.
If this new proposal does not receive approval, it could lead to an influx of lawsuits against Sackler family members. A U.S. Bankruptcy judge is expected to rule soon on whether to maintain temporary protections for the family until February.
This settlement marks a potential conclusion to a lengthy legal struggle stemming from an opioid crisis that experts believe originated with the introduction of OxyContin in 1996. This drug has since been linked to an alarming number of fatalities across the United States, with illicit fentanyl being a significant factor in over 70,000 annual deaths since 2020.
The Sackler family has faced widespread criticism and has been associated with numerous negative connotations, leading to their names being removed from institutions globally. The family continues to deny any allegations of wrongdoing. Although the Sacklers are believed to be significantly wealthier than their settlement contributions suggest, much of their wealth is reportedly held in inaccessible offshore accounts.
Connecticut Attorney General William Tong remarked that while this settlement would be a notable financial loss for the Sackler family, it would not result in their financial annihilation. He emphasized that the focus should remain on families affected by the opioid crisis and accountability for those responsible for the widespread damage caused by their actions.
Purdue Pharma had filed for bankruptcy protection in 2019 amidst a flood of lawsuits over its role in the opioid crisis, with allegations claiming that the company had misled healthcare providers about the low addiction risks associated with pain management drugs. One faction of the Sackler family recently asserted it would vigorously defend against any lawsuits proceeding under claims that Purdue and family members created a “public nuisance,” describing those accusations as baseless.
