Purdue Pharma and members of the Sackler family that own the company have agreed to a $7.4 billion settlement in principle with 15 states to resolve thousands of lawsuits filed over the role they allegedly played in fomenting the long-running opioid crisis in the U.S.
The tentative agreement in a federal bankruptcy court adds $1.4 billion to a previous deal that had been scuttled last year by the U.S. Supreme Court over the insistence of some Sackler family members who sought immunity from future lawsuits. That demand prompted objections because — unlike Purdue, which marketed OxyContin — none of the Sacklers themselves had filed for bankruptcy protection.
Under the new terms, the Sacklers would not receive immunity, but will pay $6.5 billion, which is $500 million more than their initial $6 billion offer. However, the states, municipalities, Native American tribes, and individuals who filed suit will now have to set aside hundreds of millions of dollars in an account that the Sackler family members could use to defend against any cases.
In addition, the Sackler family members will no longer control Purdue, which was blamed of helping to jumpstart the opioid crisis through its marketing of OxyContin. The company was accused of deliberately downplaying the risks of the addictive painkiller, while overstating its benefits and using various ploys to entice physicians to prescribe.
“This story is about a family of cruel billionaires who believed they were above the law, pursued by states who never backed down. Today, we are forcing Purdue Pharma and the Sackler family to pay $7.4 billion for their role in igniting one of the most devastating public health crises in American history,” said Connecticut Attorney General William Tong in announcing the latest agreement.
The proposed deal is among the largest settlements reached over the past several years stemming from sprawling litigation over the opioid crisis. Besides Purdue, several other drug manufacturers, as well as distributors and pharmacy chains, were accused of contributing to the problem. Aside from the Purdue deal, settlements worth roughly $50 billion have been announced.
An effort four years ago to reach a settlement with the Sacklers failed after some states balked at the initial payout. A later deal drew objections from the U.S. Trustee, whose office oversees the administration of bankruptcy cases for the U.S. Department of Justice. The trustee had consistently raised concerns that the legal shield sought by the Sackler family was too broad.
Indeed, there was ongoing anger that members of the Sackler family may never be served with a lawsuit over OxyContin marketing. Other manufacturers also marketed opioids inappropriately, but Purdue was arguably the most aggressive in attempting to sway doctors and patients. As a result, Purdue became a poster child for a crisis that led to nearly 645,000 deaths, including from prescription and illicit opioids, from 1999 to 2021, according to U.S. government data.
The U.S. Supreme Court effectively agreed with the concerns about immunity last June when it narrowly rejected the proposed $6 billion settlement. This prompted months of negotiations over a new framework that must now be sold to still other states, as well as local municipalities, Native American tribes and individuals that have filed thousands of lawsuits against the company.
If the latest deal is approved, the payments will go directly to communities over the next 15 years to support opioid addiction treatment, prevention, and recovery programs. The other states that agreed to the settlement include New York, California, Colorado, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and West Virginia.
This is a breaking story and will be updated.