Owners of Purdue Pharma LP, the Sackler family have reached an agreement with a coalition of attorneys general for approximately $6 billion in cash to address widespread legal claims that it fueled the US opioid crisis. The deal will bring the OxyContin manufacturer closer to exiting bankruptcy.
After weeks of mediation, the attorneys general for eight states and the District of Columbia announced the agreement after opposing a prior settlement that included a $4.3 billion cash payment. The family has agreed to pay at least $5.5 billion in cash, to be used as compensation for a crisis that resulted in about 500,000 U.S. opioid overdose deaths over the past 20 years. Additionally, the value of the transaction could rise as family members sell more assets.
The Sackler family issued a statement claiming they “sincerely regret” that OxyContin “unexpectedly became part of an opioid crisis.” The family members also said that they followed the law, but a settlement was the best method to assist in the “serious and complex public health crisis” caused by opioids.
The settlement will protect the Sacklers from civil lawsuits but they are awaiting a federal judge’s approval. They have requested a March 9 hearing for U.S. Bankruptcy Judge Robert Drain to review the agreement.
Purdue recently announced that the agreement would provide additional funding for opioid mitigation efforts, overdose rescue medication, and allow the company to resolve its bankruptcy case quickly. In 2019, Purdue filed for bankruptcy while facing thousands of legal claims accusing it and members of the Sackler family of fueling the opioid crisis through false advertising of its addictive pain medication.
In 2007 and 2020, Purdue Pharma pled guilty to misbranding and fraud charges in connection with its promotion of OxyContin. However, the family has denied any culpability.
Purdue Pharma will cease to exist once the bankruptcy plan goes into effect. It will be reborn as Knoa Pharma LLC, a new business owned by the National Opioid Abatement Trust, a group headed by the creditors of Purdue.
The Sackler family’s agreement comes on the heels of a settlement involving 3 other large drug manufacturers and Johnson & Johnson’s agreement to pay $26 billion to settle accusations over their roles in the opioid crisis.
