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Purdue Pharma’s Opioid Settlement Gets Green Light, Offers Victims Some Relief
NEW YORK – After years of intense legal battles, a federal bankruptcy court judge announced Friday that he would approve a revised settlement deal for OxyContin-maker Purdue Pharma. This agreement aims to resolve thousands of lawsuits stemming from the devastating opioid epidemic, providing some financial relief for thousands of victims.
U.S. Bankruptcy Judge Sean Lane’s decision paves the way for the Sackler family, who own Purdue Pharma, to contribute up to $7 billion over 15 years.
This new arrangement replaces a previous deal rejected by the U.S. Supreme Court last year, which had been criticized for improperly shielding family members from future lawsuits.
Judge Lane is expected to provide a detailed explanation of his decision in a hearing scheduled for Tuesday.
This settlement stands as one of the largest in a series of opioid-related agreements reached by state and local governments against drug manufacturers, wholesalers, and pharmacies. It could potentially bring a long and complex legal chapter to a close, concerning the company’s role in an opioid crisis that has been linked to 900,000 deaths in the U.S. since 1999, including those from heroin and illicit fentanyl.
Legal professionals and judges involved have characterized the Purdue Pharma bankruptcy as one of the most intricate in U.S. history. Ultimately, attorneys representing a broad spectrum of parties-including Purdue, various cities, states, counties, Native American tribes, and individuals impacted by addiction-nearly unanimously urged the judge to approve the bankruptcy plan. Purdue Pharma initially filed for bankruptcy protection six years ago amid lawsuits with claims reaching trillions of dollars.
Marshall Huebner, a lawyer for Purdue, acknowledged the immeasurable suffering, stating that he wished he could “conjure up $40 trillion or $100 trillion to compensate those who have suffered unfathomable loss.” However, he asserted that without such a possibility, “The plan is entirely lawful, does the greatest good for the greatest number in the shortest available timeframe.”
Muted Opposition This Time Around
The Purdue Pharma saga has been emotionally charged, marked by contentious arguments between the numerous groups that pursued legal action against the company. These proceedings often highlighted the inherent tension between the pursuit of justice and the practicalities of bankruptcy court.
The U.S. Supreme Court’s rejection of the prior deal was specifically due to the immunity it would have granted Sackler family members from opioid-related lawsuits.
Under the new agreement, entities that choose not to opt into the settlement retain the right to sue the family. While the Sackler family’s collective wealth is in the billions, a significant portion of their assets is held in offshore trusts, making them challenging to access through litigation.
This time, government groups have achieved a more comprehensive consensus, and opposition from individuals has been largely subdued. Out of more than 54,000 personal injury victims who cast a vote on the plan, only 218 rejected it. A larger number of eligible voters within this group did not participate.
In contrast to previous proceedings, there were no protests outside the courthouse during this latest hearing.
A handful of objectors voiced their concerns during the three-day hearing, occasionally interrupting the judge. Some argued that only victims, rather than states and other government entities, should receive settlement funds. Others pressed the judge to find Sackler family members criminally liable-a request Judge Lane stated was beyond the scope of bankruptcy court, though he noted the settlement does not preclude prosecutors from pursuing such charges.
Pamela Bartz Halaschak, a Florida woman whose husband battled addiction after being prescribed OxyContin following an accident, testified via video that the proposed deal was insufficient. “The natural laws of karma suggest the Sacklers and Purdue Pharma should pay for what they have done,” she stated.
Among the Largest Opioid Settlements
The wave of lawsuits filed by government entities against Purdue and other drugmakers, wholesalers, and pharmacy chains began approximately a decade ago.
Most of the major cases have already been settled for a collective total of about $50 billion, with the majority of these funds allocated to combat the opioid crisis. Currently, there is no centralized mechanism to track the precise allocation of these funds or a universal requirement to evaluate their effectiveness. Those most severely impacted by the crisis have generally had limited input in these processes.
Beyond their financial contribution, members of the Sackler family will formally relinquish ownership of Purdue Pharma. No family members have served on the company’s board or received payments since 2018. Unlike a similar hearing four years ago, no family members were called to testify during this week’s proceedings.
Purdue Pharma is slated for a name change to Knoa Pharma, with new overseers who will dedicate future profits to addressing the opioid crisis. This transition is anticipated to occur in the spring of 2026.
Family members will also be prohibited from involvement in any companies that sell opioids globally. Furthermore, their names will no longer be associated with institutions in exchange for charitable contributions, a practice that has already seen their names removed from numerous museums and universities.
Company documents, including many typically protected by lawyer-client privilege, are also set to be made public.
Direct Compensation for Some Victims
Unlike other major opioid settlements, this agreement includes provisions for individuals harmed by Purdue’s products to receive direct compensation. Approximately $850 million will be set aside for these victims, with over $100 million specifically allocated to assist children born experiencing opioid withdrawal.
All funds designated for individual victims are expected to be distributed next year.
Around 139,000 people have active claims for this money. However, many have yet to provide proof of being prescribed Purdue’s opioids and will therefore receive no compensation. Assuming roughly half of the individual claimants qualify, lawyers anticipate that those with prescriptions for at least six months could receive approximately $16,000 each, while those with shorter prescriptions might receive around $8,000, before legal fees reduce the actual payout.
Laureen Ferrante of Staten Island, New York, whose family member struggled with opioid addiction, expressed her frustration via video testimony on Thursday, arguing that the settlement does not adequately help individuals with substance use disorder. “Tell me how you guys can sleep at night knowing people are going to get so little money they can’t do anything with it,” she questioned.
Christopher Shore, a lawyer representing a group of individual victims, stated in court on Friday that the settlement represents a more favorable outcome than pursuing individual lawsuits against Sackler family members. “Some Sacklers are bad people,” he acknowledged, “but the reality is that sometimes bad people win in litigation.”
The majority of the settlement funds are earmarked for state and local governments to support their efforts in mitigating the damage of the opioid epidemic. Overdose death numbers have shown a decline in recent years, a trend experts believe is partly attributable to the impact of these settlement dollars.