In brief
A U.S. Bankruptcy Court judge is set to reveal his reasoning behind the approval of Purdue Pharma's plan to settle opioid-related lawsuits. The Sackler family has agreed to pay up to $7 billion over 15 years, with funds aimed at addressing the opioid crisis and compensating individual victims, marking one of the largest opioid-related settlements in history.
A U.S. Bankruptcy Court judge is set to give his reasoning on Tuesday for approving Purdue Pharma’s plan to settle thousands of lawsuits over the toll of opioids.
The deal calls for members of the Sackler family, who own the company, to pay up to $7 billion over time.
Judge Sean Lane stated last week that he would accept the plan, which is among the largest opioid settlements ever and uniquely compensates some victims of the crisis.
Settlement Funds Distribution
The Sackler family has agreed to pay up to $7 billion over 15 years, providing the majority of the funding for this settlement.
The funds will be allocated to state, local, and Native American governments to address the opioid crisis, consistent with other opioid settlements. Approximately $850 million is earmarked for individual victims, including those children born with opioid withdrawal.
Victims and those with addiction must demonstrate they were prescribed OxyContin to qualify, with potential payments of around $8,000 to $16,000 depending on duration of use and the number of claimants. Distribution of these payments for individual victims is expected next year.
Sackler Family's Stake in Purdue
In addition to financial obligations, members of the Sackler family will relinquish ownership of Purdue Pharma. Despite this change, it will not significantly affect them since no family member has been involved in the company's board or has drawn money from it since 2018. Purdue will be restructured as Knoa Pharma, managed by a state-appointed board focused on public welfare.
The Sacklers have also committed to abstain from having their names associated with institutions in exchange for donations, which has been their previous practice.
Purdue has agreed to make public a vast array of internal documents that may provide greater insight into its marketing and monitoring of opioids. Notably, the current agreement does not require Sackler family members to directly hear from people affected by OxyContin, a feature of earlier settlements.
Legal Challenges and Future Steps
Purdue filed for bankruptcy protection in 2019 amid numerous opioid-related lawsuits. A judge approved an earlier settlement, but the U.S. Supreme Court rejected it due to protections provided to Sackler family members who were not declaring personal bankruptcy.
The latest agreement allows lawsuits against Sackler family members from those opting out of the settlement. Few parties raised objections during the confirmation hearing last week, although some individuals with personal stakes in the opioid crisis expressed concerns.
