Purdue, Sacklers Agree to New $7.4B Opioid Settlement

Purdue, Sacklers Agree to New $7.4B Opioid Settlement

Introduction

All 50 U.S. states, along with the District of Columbia and U.S. territories, have agreed to a $7.4 billion settlement with Purdue Pharma, the manufacturer of OxyContin.

This deal addresses allegations that the company’s aggressive and misleading marketing practices significantly contributed to the opioid epidemic.

Terms and Timeline of the Deal

Filed in March with a federal bankruptcy court, the proposed settlement came after extensive negotiations involving state attorneys general and other stakeholders. If the court approves the plan, payments will be distributed over the next 15 years. Purdue Pharma has called this a “critical milestone” toward resolving long-standing litigation and directing funds toward efforts to combat the opioid crisis.

Sackler Family Contribution and Civil Lawsuit Rights

A key component of the deal involves the Sackler family, who currently own Purdue Pharma. They are expected to contribute about $6.5 billion to the settlement. Notably, unlike previous agreements, individuals who choose not to release the Sacklers from liability will retain the right to pursue civil lawsuits against them. Purdue emphasized that creditors who opt out of the releases can still seek legal action against the family.

Attorney General and Plaintiffs Applaud the Deal

New York Attorney General Letitia James praised the settlement, highlighting that it holds the Sacklers accountable for their central role in fueling addiction and overdose deaths. Attorneys representing plaintiffs in the National Prescription Opiate Litigation also expressed satisfaction. They noted the significance of reaching a unanimous agreement among all 55 eligible states and territories and pointed out that the deal will provide over $7 billion in resources to help communities recover.

Criticism Over Limited Victim Compensation

Despite broad approval, some advocates remain dissatisfied. An addiction recovery advocate who was personally affected by OxyContin expressed frustration with the portion of the settlement allocated to direct victim compensation. Only about $850 million is earmarked for individuals harmed by Purdue's actions. He calculated his potential payout to be roughly $3,500—an amount he feels is inadequate given the years of litigation and personal suffering. Still, he acknowledged a desire to move forward and close this chapter of his life.

Path to Finalization and Historical Context

The settlement must now gain approval from the federal bankruptcy court. Experts believe this version of the deal stands a strong chance of being accepted, including by the U.S. Department of Justice, which previously objected to earlier proposals. In July 2024, the Supreme Court overturned a prior version of the Purdue bankruptcy settlement, prompting a reworking of the plan.

Part of a Larger Wave of Opioid Settlements

If finalized, this agreement will contribute to a broader total of over $50 billion secured from companies involved in the manufacture, distribution, and retail of opioid painkillers. These settlements aim to mitigate the ongoing damage caused by the opioid epidemic, which has led to a dramatic rise in addiction, overdoses, and deaths across the United States.