A federal bankruptcy court judge has formally approved a sweeping settlement plan for Purdue Pharma, the maker of OxyContin, compelling the company's owners, the Sackler family, to contribute up to $7 billion over 15 years.
The Breakdown of the Landmark Deal
US Bankruptcy Judge Sean Lane gave the final sign-off on the deal, which resolves thousands of lawsuits accusing Purdue Pharma of fuelling the deadly opioid epidemic in the United States. The settlement mandates that the vast majority of the funds will be allocated to government entities dedicated to fighting a crisis linked to more than 900,000 deaths since 1999.
This new agreement supersedes a previous one that was struck down by the US Supreme Court last year. The court had rejected the earlier plan because it would have granted the Sackler family, who have not been directly involved with the company for seven years, broad protection from future opioid-related litigation. A key difference in the current deal is that entities choosing not to participate in the settlement can still pursue legal action against individual Sackler family members.
Compensation and Corporate Restructuring
A portion of the settlement money is designated for direct compensation. Individuals who were prescribed OxyContin, as well as survivors of those who died, are eligible to receive payments. To qualify, claimants must prove they were prescribed the drug. Payouts are estimated to be around $8,000 or $16,000, depending on the duration of the prescription and the total number of successful claimants, with distributions scheduled to begin next year.
As part of the settlement, the Sackler family will officially relinquish ownership of Purdue Pharma. The company will be rebranded as Knoa Pharma and will be operated with a public-interest mission. Furthermore, the family has agreed to a global ban on any future involvement in the sale of opioids.
Transparency and Lasting Stipulations
In a significant move towards accountability, Purdue Pharma has consented to make public a large cache of internal documents. These records are expected to provide further insight into the company's aggressive marketing and monitoring practices for its opioid products.
The Sacklers have also agreed to stop the long-standing practice of having their name placed on institutions in exchange for philanthropic contributions. While many museums and universities had already severed ties, this agreement makes the renaming ban a formal condition of the settlement.
Purdue Pharma initially filed for bankruptcy protection in 2019 amidst a deluge of litigation. Although a settlement was approved two years later, it was the Supreme Court's intervention that forced the restructured agreement now in place. The latest plan received far fewer objections during its confirmation hearing, marking a pivotal moment in the long-running legal battle over corporate responsibility in the opioid crisis.
