Purdue Pharma along with its Sackler family owners have finalized a new settlement totaling $7.4 billion to settle thousands of lawsuits claiming that the painkiller OxyContin contributed to a widespread opioid addiction crisis in the U.S., according to several state attorneys general.
This settlement was revealed nearly seven months after the U.S. Supreme Court overturned the company’s earlier effort to settle the lawsuits through a bankruptcy plan that would have granted the Sacklers extensive civil immunity from opioid-related lawsuits in exchange for a payment of up to $6 billion.
The Supreme Court determined that the Sacklers, who did not file for bankruptcy themselves, were not eligible for legal protections typically offered to bankrupt debtors for a “fresh start.”
Under the latest settlement, the Sacklers are set to pay $6.5 billion, with an additional $900 million coming from Purdue, while not fully precluding lawsuits from states, local governments, or individual victims of the opioid crisis.
The agreement was negotiated by 15 states, including notable ones like New York, California, Connecticut, Oregon, Texas, Florida, and West Virginia.
Other states will be invited to join the settlement, which requires approval from a U.S. bankruptcy judge before it can be finalized.
Connecticut Attorney General William Tong mentioned that the settlement would assist in providing closure for the victims of the opioid crisis.
“It’s not merely about money,” Mr. Tong stated. “There is not enough money in the world to make it right.”
This recent settlement aims to tackle an addiction crisis that has resulted in over 700,000 opioid overdose deaths in the United States over the last twenty years.
Besides the funds allocated to state and local governments, the settlement will also earmark between $800 million and $850 million to compensate individual victims of the opioid epidemic, as stated by Ed Neiger, an attorney representing a group of opioid victims in the Purdue bankruptcy.
Purdue has indicated that it is working to integrate the settlement into a new bankruptcy plan.
“We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, combat the opioid crisis, and provide treatment and overdose rescue medications that will save lives,” Purdue expressed in a statement.
Purdue is among several pharmaceutical manufacturers, distributors, pharmacy operators, and others who have collectively agreed in recent years to pay about $50 billion to settle lawsuits and investigations by states and local governments, accusing them of contributing to a significant opioid addiction epidemic in the U.S.
Purdue filed for bankruptcy in 2019 due to thousands of lawsuits claiming it and members of the Sackler family perpetuated the epidemic through misleading marketing of its highly addictive painkiller.
The company plead guilty to charges of misbranding and fraud related to its marketing of OxyContin in 2007 and again in 2020.
While members of the Sackler family have denied any wrongdoing, they have expressed “regret” over OxyContin’s impact on the opioid crisis.
