A federal bankruptcy court judge has formally approved a monumental settlement plan for Purdue Pharma, the maker of OxyContin, finally resolving thousands of lawsuits linked to the devastating US opioid crisis.
The Terms of the Landmark Deal
US Bankruptcy Judge Sean Lane gave the official sign-off on Tuesday, mandating that the Sackler family, who own the company, must contribute up to $7 billion over a 15-year period. The vast majority of this colossal sum is designated for government entities to fund the fight against an opioid epidemic connected to over 900,000 American deaths since 1999.
In a significant provision for individual victims, a portion of the money is scheduled for distribution next year to qualifying individuals who were prescribed OxyContin and to their survivors. To participate, people with addiction or survivors of those who died must prove the OxyContin prescription. Successful claimants could receive payments estimated at $8,000 or $16,000, depending on the duration of their prescription and the total number of claimants.
Key Differences from the Rejected Plan
This newly approved agreement replaces a previous settlement that was struck down by the US Supreme Court last year. The earlier plan was rejected because it would have granted the Sackler family sweeping protection from future opioid-related lawsuits, a provision the court found improper.
Under the current, court-approved deal, entities that choose not to opt into the financial payments retain the right to sue members of the Sackler family directly. Furthermore, the family members, who have not been directly involved with Purdue Pharma for seven years, will officially relinquish ownership. They will also be barred from selling opioids anywhere in the world.
As part of the settlement's cultural impact, Sackler family members have also agreed to stop having their name placed on institutions in exchange for charitable contributions—a common practice in their past that many museums and universities have since distanced themselves from.
The Future of Purdue Pharma and Document Disclosure
The company itself will undergo a fundamental transformation. It will eventually emerge from bankruptcy under a new name, Knoa Pharma, and will be operated with a public-interest mission, a stark contrast to its previous profit-driven model.
In a move aimed at providing historical accountability, Purdue Pharma has agreed to make public a vast trove of internal documents. This release is expected to shed further light on the company's aggressive marketing and monitoring practices concerning its opioid products.
This settlement stands as one of the largest in a series of nationwide opioid agreements against drugmakers, wholesalers, and pharmacies, which together total approximately $50 billion.
