Purdue Pharma has presented an updated settlement proposal to a bankruptcy court, aiming to resolve thousands of lawsuits related to the opioid painkiller OxyContin. The plan includes a payment of up to $7 billion from the Sackler family, who own the company.
The submission marks a significant point in the complex legal battle that has unfolded over the past five years.
As part of the proposed agreement, the Sackler family, whose net worth was estimated at approximately $11 billion in 2020 and 2021, would relinquish ownership of Purdue Pharma. They would also contribute funds over a 15-year period, with the largest initial payment.
Prior to Purdue Pharma's 2019 bankruptcy filing, triggered by numerous lawsuits from state and local governments, the Sackler family members had already stepped down from the company's board, ceased receiving payments, and ended other involvement.
The restructured company would be governed by a board appointed by state authorities, with the goal of addressing the opioid crisis that has caused hundreds of thousands of deaths in the U.S. since OxyContin's introduction in 1996. The initial wave of overdoses was linked to OxyContin and similar prescription opioids, followed by heroin and, more recently, illicit forms of fentanyl.
The current settlement plan is the result of months of mediation with various groups that had sued Purdue Pharma, and it has garnered support from nearly all of them, according to court filings.
Final approval of the plan is expected to take several more months.
An earlier version of the settlement had received bankruptcy court approval but was later rejected by the U.S. Supreme Court due to provisions that protected the Sackler family from civil lawsuits, despite the fact that they had not personally filed for bankruptcy.
Under the revised plan, plaintiffs must actively opt in to receive their full share of the settlement. Those who do not opt in retain the right to sue the Sackler family members, who have agreed to contribute approximately $1 billion more than under previous proposals. The total cash contribution from the Sacklers will depend on the number of parties joining the settlement and the proceeds from the sale of foreign drug companies. A portion of their contribution will be reserved for potential judgments if they are sued and lose, with any remaining funds to be added to the main settlement.
The Sackler family's role in the opioid crisis has led to widespread condemnation, with their name being removed from various cultural and academic institutions. The family members continue to deny any culpability.
Other drug manufacturers, distributors, and pharmacy chains have already reached settlements in opioid-related lawsuits totaling approximately $50 billion. If finalized, Purdue Pharma's settlement, which includes about $900 million from company funds, would be among the largest.
The majority of the settlement funds are earmarked for combating the opioid crisis.
Purdue Pharma's settlement stands out as the only major agreement to allocate direct payments to victims, potentially providing over $850 million to individuals who became addicted, their families, and infants born with opioid withdrawal symptoms. This amount is greater than in previous versions of the plan.
The deadline to apply for individual victim compensation has already passed. In prior iterations, individual payments were projected to range from approximately $3,500 to $48,000. Families have expressed divided opinions regarding the settlement.
As part of the agreement, Purdue Pharma will also release millions of documents to a public repository. Furthermore, the company continues to produce naloxone, a low-cost medication used to reverse opioid overdoses.