Purdue Pharma and the Sackler family have recently reached a $7.4 billion settlement in principle to resolve thousands of lawsuits alleging that OxyContin propelled a widespread opioid addiction crisis in the United States. This new settlement replaces the former settlement of up to $6 billion with civil immunity for the Sackler family.
The new settlement, negotiated by fifteen states, involves a $6.5 billion payment from the Sacklers and a $900 million payment from Purdue. It does not fully terminate lawsuits from states, local governments, and individual victims of the opioid crisis, however, and those who do not want to join in the settlement may be able to pursue lawsuits against the Sackler family. States not involved in the settlement negotiations will be asked to sign on the settlement, which must still be approved by a United States bankruptcy judge before it becomes final.
The settlement also requires members of the Sackler family to give up ownership of Purdue, something they have started to do by stepping down from the Board of Directors and not taking any distributions from the company since prior to the company’s bankruptcy filing. Purdue would become a new entity with its Board appointed by the states and others who sued the company and will be overseen by a monitor and prevented from lobbying or marketing opioids.
Purdue is working to incorporate the settlement into a new bankruptcy plan, saying, “We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis, and deliver treatment and overdose rescue medicines that will save lives.”
If approved, the settlement will deliver funds to participating states, local governments, victims, and others who have previously sued the Sackler Family or Purdue Pharma. A significant amount of the settlement funds will be distributed in the first three years, with $1.5 billion paid out in the first payment, followed by $500 million after one year, an additional $500 million after two years, and $400 million after three years.
Connecticut Attorney General William Tong, who was involved in the negotiations, said, “There will never be enough justice or dollars to restore those families or right this terrible wrong. I will continue to insist that Connecticut’s settlement funds be used to save lives through opioid treatment and prevention, including direct relief to victims and their families.” New York Attorney General Letitia James echoed that sentiment, saying, “While no amount of money will ever fully repair the damage they caused, this massive influx of funds will bring resources to communities in need so that we can heal.”
West Virginia Attorney General JB McCuskey agreed to the deal but went a step further in criticizing the Sackler family, saying, “While West Virginians’ lives were being destroyed by opioid addiction, the Sacklers were cashing in every time someone got hooked — getting rich with no regard to the toll their drugs were taking on people, families and our communities.”