A federal bankruptcy judge on Friday said he plans to approve OxyContin maker Purdue Pharma's latest agreement to resolve thousands of lawsuits over opioid costs. The agreement also includes funding for thousands of victims of the epidemic.
The deal, overseen by U.S. Bankruptcy Judge Sean Lane, requires members of the Sackler family, which owns the company, to contribute up to $7 billion and relinquish ownership. The new agreement replaces one that the U.S. Supreme Court struck down last year because it inadequately protected family members from future lawsuits. The judge said he would explain his decision at a hearing Tuesday.
The agreement is the largest in a series of opioid settlements brought by state and local governments against drug companies, wholesalers and pharmacies, totaling about $50 billion. This could conclude a long chapter, and perhaps an entire book, in the legal odyssey surrounding efforts to hold the company accountable for its role in the opioid crisis that has killed 900,000 people in the United States since 1999, including deaths from heroin and illegal fentanyl.
Lawyers and judges involved have described it as one of the most complex bankruptcies in U.S. history. In the end, attorneys representing Purdue, cities, states, counties, Native American tribes, addicts and others almost unanimously asked a judge to approve Purdue's bankruptcy plan, which they filed for protection six years ago in the face of a lawsuit with claims that could run into the trillions.
“If only we could come up with $40 trillion or $100 trillion to compensate people who have suffered untold losses,” Purdue attorney Marshall Huebner told the justices. But absent that possibility, he said, “this plan is perfectly legal and provides the greatest benefit to the greatest number in the shortest available period.”
The opposition parties are pretty quiet this time.
The story was an emotional and contentious discussion between the many groups that brought Purdue to court, often revealing potential mismatches between the pursuit of justice and the practical role of the bankruptcy court.
The U.S. Supreme Court rejected an earlier agreement, saying it was inappropriate to grant members of the Sackler family immunity from lawsuits over opioids. Under the new arrangement, companies that don't agree to the settlement can also sue. The family's combined assets amount to billions of dollars, much of which is held in trust in offshore accounts and difficult to access through litigation.
This time, the government bodies involved have reached a more complete agreement, and opposition from individuals has largely been suppressed. Of more than 54,000 personal injury victims who voted on whether to accept the plan. Only 218 people said no. More people who were part of that group did not vote.
Get weekly health news
Get the latest medical news and health information every Sunday.
Unlike other cases, there were no protests outside the courthouse.
A small number of opponents spoke during Thursday's hearing, sometimes interrupting the judge. Some argued that only the victims, not the state or other government agencies, should receive the settlement money. Lane said that is beyond the scope of bankruptcy court, but the settlement does not preclude prosecutors from pursuing it, and some called for a judge to find members of the Sackler family criminally responsible.
A Florida woman struggling with addiction after her husband was given OxyContin after an accident said in court that the agreement was not enough.
“The natural law of karma suggests that the Sacklers and Purdue Pharmaceuticals should pay for what they have done,” Pamela Bartz Harashak said in the video.
Agreement would be the largest opioid settlement
The slew of lawsuits brought by government agencies against Purdue and other drug companies, drug wholesalers and pharmacy chains began about a decade ago.
Most of the major lawsuits have already been settled for a total of about $50 billion, with most of the money going to fight the opioid crisis. There is no mechanism to track every destination or comprehensive requirements to assess whether spending is effective. Those hardest hit generally have no voice.
The deal at Purdue may be one of the largest. Members of the Sackler family will have to pay up to $7 billion and give up ownership of the company. Unlike a similar hearing four years ago, no one was called to testify at this week's hearing.
current trends
Alberta Premier supports new large-scale project, says pipeline negotiations are underway
Second batch of Epstein documents released: Key insights and takeaways
The company will change its name to Qunoor Pharma and appoint a new supervisor who will dedicate future profits to fighting the opioid crisis. It could happen in the spring of 2026.
There are also some non-financial provisions. Some members of the Sackler family will have to abandon their involvement in companies that sell opioids in other countries.
Families will also be prohibited from having their names listed on institutions in exchange for charitable donations. The name has already been removed from museums and universities.
And company documents will be made public, including many documents that would normally be subject to attorney-client privilege.
Some people hurt by Purdue's opioids will receive some money
Unlike other major opioid settlements, individuals harmed by Purdue's products will be in line for money as part of the settlement. Approximately $850 million will be set aside for them, more than $100 million of which will be allocated to support children born to cope with opioid withdrawal.
All funds for individual victims are expected to be delivered next year. It will take up to 15 years for the government to receive the full allocation.
Approximately 139,000 people are actively claiming this money. But many of them have shown no evidence that they were prescribed Purdue's opioids and will receive none. Assuming that about half of individual claimants qualify, lawyers project that those who had a prescription for at least six months would receive about $16,000 each, and those with shorter-term prescriptions about $8,000, before deducting legal fees that would reduce the amount they actually receive.
World Details More Videos
People have until March 1 to agree not to sue the Sacklers and apply for the funds.
A woman whose family has struggled with opioid addiction told the court in a video Thursday that the settlement does nothing to help people with substance use disorders.
“How can you sleep at night knowing that people are getting so little money that you can't do anything with it?” asked Laureen Ferrante of Staten Island, New York.
Christopher Shore, an attorney representing individual victims' groups, said in court Friday that the settlement is a better deal than taking the Sackler's family to court. “Some of the Sacklers are bad, but the truth is sometimes the bad guys win in lawsuits,” he said.
Most of the funds will go to state and local governments for efforts to reduce the harm of the opioid epidemic.
The number of overdose deaths has declined over the past few years, and experts believe some of this decline is due to the impact of settlements.