A federal bankruptcy judge has signed off on a landmark settlement that will force the Sackler family to pay billions of dollars and permanently relinquish control of Purdue Pharma, marking a major turning point in one of the nation’s most consequential legal battles over the opioid epidemic.
According to The Associated Press, U.S. Bankruptcy Judge Sean Lane formally approved the plan Tuesday and said he would issue his full explanation later in the day. The agreement requires the Sacklers — Purdue’s wealthy owners — to contribute up to $7 billion over 15 years.
Most of that money will go to state, local, and tribal governments that have spent years battling an addiction crisis linked to more than 900,000 deaths since 1999.
For the first time, the settlement also directs a significant share of the funds to individual victims. People who were prescribed OxyContin and their survivors will be able to apply for payments next year.
Awards are expected to be about $8,000 or $16,000, depending on how long they were prescribed the drug and how many people ultimately qualify. Roughly $850 million is set aside for these personal claims, including for children born dependent on opioids.
The deal replaces an earlier Purdue settlement that the U.S. Supreme Court struck down last year, ruling that it improperly shielded Sackler family members from future lawsuits. Under the new terms, governments and victims who do not opt in can still take family members to court — a key change that allowed the plan to move forward with far fewer objections.
As part of the agreement, the Sacklers will give up ownership of Purdue completely, though their involvement in company operations had already ended in 2018.
Purdue will be restructured into a new entity called Knoa Pharma, overseen by a board appointed by state officials and tasked with operating under a public-interest mission. The family also agreed to stop having their name attached to institutions in exchange for donations.
Purdue will additionally release a large collection of internal documents, a move that could reveal new details about how the company marketed and monitored its blockbuster painkiller OxyContin.
The ruling brings the sprawling legal war over Purdue one step closer to its conclusion. The company sought bankruptcy protection in 2019 while facing thousands of lawsuits from governments and individuals who accused it of fueling the modern opioid epidemic.
A settlement approved two years later was thrown out by the Supreme Court over liability protections granted to the Sacklers despite their not filing for bankruptcy.
This time, the agreement drew only limited opposition, with a handful of individuals — including people battling addiction and family members of those who died — raising concerns during last week’s three-day hearing.
The Purdue settlement is one of the largest in a series of opioid-related agreements totaling roughly $50 billion across drugmakers, distributors, and pharmacies.
With Judge Lane’s approval, billions of dollars are now set to be released for addiction treatment, recovery programs, and compensation for victims, potentially closing one of the most contentious chapters in the nation’s response to the opioid crisis.
