Purdue Pharma Proposes Opioid Settlement, Sacklers to Pay $7B

Late Tuesday, Purdue Pharma approached a bankruptcy judge with a revised settlement proposal designed to resolve countless legal actions connected to the impact of OxyContin, its potent prescription painkiller. This plan entails the Sackler family, owners of the company, contributing up to $7 billion.
The submission marks a significant step in a complex legal battle that has persisted for over five years.
According to the proposal, the Sackler family, whose worth was assessed between $11 billion in documents from 2020 and 2021, would relinquish ownership of Purdue and commit financially over 15 years, with the largest installment paid initially. Family members had stepped down from the Purdue board, ceased financial withdrawals, and cut any involvement with the company prior to its bankruptcy filing in 2019 amid numerous lawsuits from a range of state and local governments and other entities.
The intended outcome of the settlement is to establish a new organization managed by a board appointed by state governments with a mission to combat the opioid crisis, which has been associated with hundreds of thousands of fatalities in the U.S. since OxyContin’s introduction in 1996. The initial surge of lethal overdoses was linked to OxyContin and similar prescription medications, followed by waves involving heroin and, more recently, illicit fentanyl versions.
This settlement was meticulously crafted during several months of mediation involving multiple groups that took legal action against Purdue, with most now in favor, as indicated in mediator reports filed in court. Final approval would require several additional months.
A previous settlement was initially endorsed by a bankruptcy court, but last year the U.S. Supreme Court rejected it due to the protection it afforded Sackler family members from civil litigation despite not filing for bankruptcy themselves.
The latest proposal necessitates plaintiffs to opt in to receive their full share of the settlement. Failure to do so permits them to still pursue litigation against the Sacklers, who have committed an additional $1 billion beyond previous plans. The amount contributed would partially depend on the number of parties who opt into the settlement and the sale of overseas pharmaceutical companies. A portion of their contribution is allocated for potential legal judgments; funds not utilized would revert to the primary settlement pool.
While the Sackler family members have been portrayed negatively and had their name excluded from art institutions and universities worldwide due to their involvement with Purdue, they continue to deny any wrongdoing.
Other pharmaceutical manufacturers, distributors, and pharmacy chains have settled opioid-related lawsuits totaling approximately $50 billion. Purdue’s proposed settlement, which also includes around $900 million from the company itself, could rank among the largest if completed.
In these settlements, the core of the funds is intended to aid efforts in mitigating the opioid epidemic. Unique to Purdue’s proposal is the direct financial compensation it offers to victims, which could surpass $850 million earmarked for individuals who have suffered from addiction, their families, and infants born with withdrawal symptoms, an increase over previous figures.
The deadline for applying for these funds expired several years ago, with prior expectations for individuals to receive between $3,500 and $48,000. Families remain divided on the deal.
Additionally, Purdue would disclose millions of documents to a public repository as part of the settlement, alongside producing a low-cost form of naloxone, a life-saving drug that counteracts overdose effects.