Bankruptcy Judge Approves $7.4 Billion Settlement for Purdue Pharma Amid Opioid Crisis
A bankruptcy judge has approved a plan to settle Purdue Pharma's bankruptcy with a $7.4 billion payout contributed by Purdue and the Sackler family. Purdue Pharma, which filed for bankruptcy in 2019 amid thousands of lawsuits alleging its role in fueling the opioid epidemic, will be replaced by Knoa Pharma, a nonprofit entity established to address the ongoing opioid crisis.
The Sackler family will relinquish ownership of Purdue as part of the settlement, which mandates contributions expected to total between $6.5 billion and $7 billion. Individual victims affected by the opioid epidemic are slated to receive up to $865 million, while the majority of funds will be allocated to state and local governments focused on addiction treatment and prevention.
This settlement is notable for being higher than a prior deal rejected by the US Supreme Court, which had attempted to provide immunity from future civil lawsuits to the Sackler family. The new agreement does not grant such immunity. Importantly, more than 99% of creditors—including government groups and personal injury victims—voted in favor of the plan.
The opioid crisis has been linked to approximately 900,000 deaths in the United States since 1999. Separately, Purdue pleaded guilty in 2020 in a Department of Justice criminal case related to the crisis.
