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Judge Approves $7.4 Billion Purdue Pharma Settlement Over Opioid Crisis
A U.S. bankruptcy judge ruled Friday to approve a $7.4 billion settlement forcing Purdue Pharma and its owners, the Sackler family, to pay for their role in fueling the nation's opioid epidemic, ending years of legal battles and unlocking funds for addiction treatment and prevention.
The decision clears the way for the finalization of a restructuring plan first proposed in January, which increases payouts by over $1 billion compared to a prior agreement rejected by the Supreme Court last year. Purdue Pharma, the maker of OxyContin, filed for bankruptcy in 2019 amid thousands of lawsuits accusing the company and the Sacklers of aggressively marketing the drug while downplaying its addiction risks.
End of a Legal Saga
Steve Miller, chairman of Purdue's board, called the ruling a turning point, stating in a Friday announcement that the deal "unlocks billions in recoveries and significant non-monetary benefits." The agreement strips the Sacklers of company ownership, transferring control to a new nonprofit, Knoa Pharma, which will focus on addressing the opioid crisis.
The settlement follows Purdue's 2020 guilty plea in a separate Department of Justice case, though that agreement did not resolve lawsuits from state, local, and tribal governments. Unlike the earlier rejected deal, this version does not grant the Sacklers immunity from future opioid-related lawsuits.
Funding for Treatment and Prevention
Under the terms, the Sackler family will contribute between $6.5 billion and $7 billion, despite longstanding denials of wrongdoing. The funds will primarily support state and local governments, with a portion-up to $865 million-earmarked for direct compensation to individual victims.
California Attorney General Rob Bonta, among 55 state attorneys general backing the deal, emphasized its impact in June: "By holding Purdue Pharma and the Sackler family accountable, we're securing critical funds for addiction treatment, prevention, and recovery."
Overwhelming Support Despite Criticism
While some victims and advocates argued the settlement falls short of full justice, the plan received near-unanimous creditor approval, with over 99% voting in favor. Critics had previously objected to the Sacklers' lack of personal bankruptcy filings and the limited direct compensation for those harmed by OxyContin's role in the crisis, which has been linked to 900,000 U.S. deaths since 1999.
"Today cements the end of a long chapter, and brings us very near to the end of the book for Purdue."
Steve Miller, Chairman of Purdue Pharma's Board
