Judge Ends Years of Legal Conflict
A bankruptcy judge approved a $7.4bn settlement on Friday that forces Purdue Pharma and its billionaire owners to pay for their role in the US opioid crisis. The decision concludes years of legal battles aimed at holding the OxyContin-maker and the Sackler family accountable. It also frees long-delayed funds for people struggling with addiction. Purdue filed for bankruptcy in 2019 after thousands of lawsuits accused the company of driving the opioid epidemic.
New Deal Surpasses Previous Offer
The agreement adds more than $1bn to an earlier settlement rejected by the Supreme Court last year. Steve Miller, chairman of the Purdue board, said the plan closes a long chapter and brings the case close to its final resolution. He said the restructuring unlocks billions in recoveries and offers major non-financial benefits.
Nonprofit Successor Set to Take Control
The Sacklers must surrender ownership of Purdue Pharma. A nonprofit named Knoa Pharma will take charge and focus on addressing the opioid crisis. Purdue became widely known for producing and promoting OxyContin, a painkiller linked to the path toward heroin and other drugs. The medication is blamed for accelerating a deadly crisis tied to about 900,000 US deaths since 1999.
Claims Target Purdue’s Promotion Tactics
Thousands of lawsuits accused Purdue and Sackler family members of aggressively promoting 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 deal did not resolve the many civil lawsuits from states, local governments, tribal nations, and other groups, which helped push the company into bankruptcy.
Supreme Court Rejects Liability Shield
A previous settlement sought to protect 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 settlement offers no immunity from future opioid-related claims. The family is expected to contribute between $6.5bn and $7bn and continues to deny wrongdoing.
Victims to Receive Direct Payments
Some individuals argued that the settlement still underpaid victims. Individual victims could receive up to $865m. Despite objections, the plan earned overwhelming support from government groups and personal injury claimants. Purdue said in October that more than 99% of creditors approved the restructuring.
Funds Aimed at Treatment and Prevention
State and local governments will receive most of the settlement money. Many officials said the funds will support addiction treatment, prevention programmes, and recovery services across the country. California Attorney General Rob Bonta said in June that holding Purdue and the Sacklers responsible delivers essential support to communities harmed by the crisis.
