A federal bankruptcy judge on Friday officially approved the latest, and likely final, settlement for OxyContin maker Purdue Pharma and its owners, the Sackler family, requiring them to pay up to $7.4 billion to resolve thousands of lawsuits over the company’s central role in fueling the U.S. opioid epidemic.
The ruling by Judge Sean Lane of the Southern District of New York marks a pivotal, if painful, close to one of the most complex corporate bankruptcy sagas in U.S. history, paving the way for billions of dollars to finally flow to states, local governments, and individual victims.
The Cost of Accountability
The $7.4 billion agreement is a revised plan, crafted after the U.S. Supreme Court rejected a previous deal that would have granted the Sackler family blanket immunity from future civil lawsuits. The new plan offers less protection to the Sacklers, making it more palatable to a vast majority of creditors.
The settlement is structured around several critical components:
- Sackler Contribution: Members of the wealthy Sackler family will contribute a massive $6.5 billion to $7 billion of their personal fortune over 15 years, starting with a $1.5 billion initial payment upon the plan’s effective date. The family members will officially relinquish ownership and control of Purdue Pharma.
- Purdue’s Role: Purdue Pharma will pay an additional $900 million upfront.
- Victim Compensation: A pool of up to $865 million has been set aside specifically for individual victims of the opioid crisis, with lawyers estimating that individuals who received long-term prescriptions for Purdue’s opioids could receive around $16,000 before legal fees.
- The New Entity: Purdue Pharma will be converted into a new, independent non-profit entity named Knoa Pharma. This new company will focus on developing and distributing opioid overdose reversal and addiction treatment medications, with all future profits dedicated to addressing the opioid crisis. The Sackler family will have no role in this new entity.
A New Precedent for Civil Liability
A core distinction of this approved plan is the greater scope it allows for victims to pursue the Sacklers personally. Entities and individuals who choose not to opt into the settlement will retain the right to sue members of the Sackler family, a crucial concession made after the Supreme Court’s prior rejection of the deal.
However, the vast majority of creditors—including attorneys general from all 55 eligible U.S. states and territories—supported the revised plan, arguing that while it doesn’t deliver criminal accountability, it represents the best and fastest way to get urgently needed funding to communities devastated by the crisis.
“The plan is entirely lawful, does the greatest good for the greatest number in the shortest available timeframe,” argued Marshall Huebner, a lawyer for Purdue, acknowledging that no amount of money could truly compensate for the human toll of the epidemic.
The Non-Financial Mandates
Beyond the cash payout, the settlement imposes several non-financial mandates that close the book on the Sackler family’s influence:
- Opioid Ban: Sackler family members are permanently barred from involvement in any company that sells opioids anywhere in the world.
- Naming Ban: They are also barred from having their names added to institutions in exchange for charitable contributions.
- Public Document Library: The settlement creates a public repository of internal company documents—larger than the entire tobacco industry repository—to make available millions of documents related to Purdue’s historical sales and marketing practices, providing transparency to a decades-long tragedy.
Judge Lane is expected to release the full, detailed written opinion of his decision on Tuesday. While the saga is legally complex, the approval marks a monumental shift of resources toward abatement efforts for the opioid crisis, which has been linked to nearly 900,000 deaths in the U.S. since 1999.