Purdue, Sacklers Agree to $7.4B Opioid Settlement

Purdue, Sacklers Agree to $7.4B Opioid Settlement

Introduction

Purdue Pharma and its owners, the Sackler family, have agreed to a $7.4 billion settlement to resolve thousands of lawsuits accusing the company of fueling the U.S. opioid addiction crisis through its marketing of OxyContin.

Settlement comes after nearly 7 months

This settlement comes nearly seven months after the U.S. Supreme Court blocked Purdue’s previous attempt to resolve the lawsuits through a bankruptcy plan. The earlier proposal would have granted the Sacklers broad civil immunity from opioid-related claims in exchange for a $6 billion payment. However, the Court ruled that because the Sacklers had not personally declared bankruptcy, they were not entitled to the same legal protections designed for bankrupt debtors.

Sackler & Purdue to contribute $6.5 billion and $900 million

Under the new agreement, the Sackler family will contribute $6.5 billion, with Purdue adding $900 million. Unlike the previous deal, this settlement does not entirely shield the Sacklers from future lawsuits. States, local governments, and individual victims who choose not to join the settlement may still pursue legal action against the family, though the Sacklers have stated they will vigorously defend themselves in court.

The settlement was negotiated by 15 states, including New York, California, Connecticut, Oregon, Texas, Florida, and West Virginia. Other states will be given the opportunity to join, and a U.S. bankruptcy judge must approve the agreement before it becomes final.

Connecticut’s Attorney General described the settlement as an important step toward justice for opioid crisis victims, emphasizing that while financial compensation is significant, “there is not enough money in the world to make it right.”

Impact of the Settlement

The opioid epidemic has caused over 700,000 overdose deaths in the U.S. over the past two decades. This agreement aims to provide funds for prevention, treatment, and recovery efforts while also compensating those affected by the crisis.

As part of the settlement, between $800 million and $850 million will be allocated to individual victims of opioid addiction. The remaining funds will be distributed to state and local governments to support opioid abatement programs. Purdue has confirmed that it is working to incorporate this settlement into a new bankruptcy plan.

Purdue's statement

In a statement, Purdue Pharma expressed satisfaction with the deal, stating: "We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis, and provide treatment and overdose rescue medicines that will save lives."

Purdue’s Role in the Opioid Epidemic

Purdue is one of several drug manufacturers, distributors, and pharmacy operators that have collectively agreed to pay around $50 billion in recent years to settle lawsuits accusing them of contributing to the opioid crisis.

Facing thousands of lawsuits, Purdue Pharma filed for bankruptcy in 2019. The lawsuits alleged that the company and the Sackler family used deceptive marketing tactics to promote OxyContin, downplaying its addictive properties and fueling widespread misuse.

Purdue previously pleaded guilty to misbranding and fraud charges related to OxyContin’s marketing in 2007 and 2020. While the Sackler family has denied any wrongdoing, they have expressed "regret" over the drug’s role in the crisis.