Purdue Pharma, the manufacturer of the prescription painkiller OxyContin, is set to be dissolved by the end of the week and replaced by a new company focused on public benefit. This development comes as a sweeping legal settlement, resolving thousands of lawsuits, takes effect.
Federal Judge Approves Criminal Sentence
A federal judge on Tuesday delivered a criminal sentence to the company, resolving a US Department of Justice investigation and clearing the final hurdle for the settlement. The sentence was a necessary step to allow the broader settlement to proceed.
Victims of the opioid crisis, which has been linked to over 900,000 deaths in the US since 1999, provided impact statements during the hearing. Many urged the judge to reject the negotiated sentence, arguing it fails to deliver true justice.
Details of the Sentence
Purdue reached a deal with the Justice Department in 2020 to resolve criminal and civil investigations. The company admitted it lacked an effective program to prevent its powerful painkillers from being diverted to the black market, despite claims to the US Drug Enforcement Administration. It also admitted paying doctors through a speakers program to prescribe its drugs and paying an electronic medical records company to send information encouraging more opioid prescriptions.
Only the company was charged; no individuals faced charges. The guilty plea and civil settlement included $8.3 billion in forfeitures, fines, and penalties. However, the federal government agreed to collect just $225 million, contingent on Purdue reaching a separate settlement for thousands of lawsuits from state, local, and Native American tribal governments, among others. The guilty plea did not include restitution to victims.
After years of legal battles, the broader sentence was approved by a bankruptcy judge in November.
Victims Speak Out
Judge Madeline Cox Arleo heard from individuals affected by opioids, including mothers who lost sons to overdose, a teenager born into withdrawal, and people who became addicted after being prescribed OxyContin. Many asked Arleo to reject the negotiated sentence.
Alexis Pluis, a mother from upstate New York who lost her son to opioids in 2014, expressed frustration that she cannot locate medical records to claim compensation. “We still deserve justice,” she said. “And this isn’t it.”
More than 54,000 people with personal injury claims voted to accept the settlement; about 200 voted against it. Michele Wagner, whose son died of an overdose, called for criminal charges against Sackler family members. “Justice to me looks like more than just money,” she said.
Kara Trainor, who recovered from an addiction that began with an OxyContin prescription in 2002, supported the settlement, stating that closure is essential for healing.
Sackler Family Contributions
The settlement, which could take effect as soon as Friday, requires Sackler family members to contribute up to $7 billion over 15 years. Most of these funds will go to government entities to combat the opioid crisis. Judge Arleo questioned why payments were spread over 15 years, suggesting the family prefers to pay from future income. A Purdue lawyer noted that lawsuits against the company included claims totaling over $40 trillion in damages.
This settlement is among the largest involving drugmakers, wholesalers, and pharmacies in recent years and is the only major one to include payments for individual victims or their survivors. Individual payments are expected to range from $8,000 to $16,000. Overall, settlements are worth more than $50 billion, with most funds directed at addressing the overdose epidemic.
Under the deal, Sackler family members are shielded from opioid-related lawsuits from those who agree to payments. The family received approximately $10.7 billion from Purdue between 2008 and 2018, though nearly half was used for taxes.
New Company to Replace Purdue
As part of the settlement, Purdue will cease to exist and be replaced by Knoa Pharma, a company with a board appointed by states, aimed at combating the opioid crisis. Millions of internal Purdue documents will be made public. Sackler family members have also agreed not to object if their names are removed from museums and other institutions they have supported.
