A U.S. Bankruptcy Court judge is set to provide clarity on Tuesday regarding the approval of Purdue Pharma's settlement plan, which aims to resolve an extensive list of lawsuits linked to the opioid crisis. The arrangement involves the Sackler family, owners of Purdue, agreeing to disburse up to $7 billion over a span of 15 years.
Judge Sean Lane indicated last week that he would support the proposed settlement, which stands out as one of the most significant opioid settlements to date. Unlike previous agreements, this one is designed to allocate compensation not only to governmental entities but also to individual victims affected by the opioid epidemic.
Funds Allocated to Governments and Individuals
The settlement stipulates that family members of the Sackler clan will contribute $7 billion, which will primarily go towards supporting state, local, and Native American communities in tackling the ongoing opioid crisis. Additionally, approximately $850 million is earmarked for individual victims, including children suffering from opioid withdrawal.
To qualify for the individual payout, victims must demonstrate that they were prescribed OxyContin. Eligible individuals are expected to receive payments fluctuating between $8,000 to $16,000, depending on their duration of use and the total number of claimants. Disbursements for individual claims are projected to commence next year.
Ownership Changes and Further Accountability
In a significant shift, the Sackler family will relinquish control of Purdue Pharma. While this may not drastically impact the family's operations—since no family member has been involved in the company’s board or financial gains since 2018—the reorganization will see Purdue replaced by a new entity named Knoa Pharma, overseen by a board appointed by state authorities with a focus on public welfare.
As part of the settlement, Sackler family members have consented to abstain from attaching their names to any institutions in return for contributions, a practice they have historically engaged in. Furthermore, Purdue has agreed to publicly disclose extensive internal documents that could illuminate their promotion and oversight of opioids.
Notably, this agreement does away with the provision of requiring Sackler family members to hear testimonials from individuals negatively impacted by OxyContin, a feature present in previous settlements.
Conclusion of a Protracted Legal Battle
Purdue Pharma filed for bankruptcy protection in 2019 following an avalanche of lawsuits over its role in the opioid crisis. Although a settlement was initially approved two years later, the U.S. Supreme Court later struck it down when it granted the Sackler family immunity from lawsuits despite not declaring bankruptcy personally.
The current settlement plan stands with minimal objections from involved parties, although some individuals directly affected by opioid addiction voiced concerns during the recent confirmation hearings.
