Purdue Pharma and the members of the Sackler family who own the company agreed in principle to pay a $7.4 billion settlement to resolve thousands of lawsuits over their alleged role in the opioid crisis, state attorneys general announced Thursday.
The settlement in principle adds $1.4 billion more than the prior settlement, which was invalidated by the Supreme Court last June due to a provision in the deal immunizing some members of the wealthy Sackler family from civil lawsuits in exchange for $6 billion.
That provision garnered objection because while Purdue filed for bankruptcy protections, the Sacklers themselves did not.
New York Attorney General Letitia James (D) said the overall settlement was worth up to $7.4 billion, which would include nearly $900 million from Purdue.
The deal, negotiated by a bipartisan team, is subject to court approval and attorneys said more details need to be finalized in the coming weeks. It would take effect toward the end of the year.
The settlement doesn’t give the Sacklers broad immunity but only from entities that agree to the settlement.
The settlement ends the Sacklers’ control of Purdue and ability to sell opioids in the United States. It will deliver funding directly to communities across the country over the next 15 years to support opioid addiction treatment, prevention and recovery programs.
If approved, the settlement would be the largest to date with individuals responsible for contributing to the deadly opioid epidemic. Local, state, Native American tribal governments and others have filed thousands of lawsuits seeking to hold manufacturers, distributors and pharmacies responsible.
The settlement will deliver funds to the participating states, local governments, affected individuals and other parties who have previously sued the Sacklers or Purdue.
A significant amount of the settlement funds will be distributed in the first three years, with $1.5 billion paid out in the first payment, followed by $500 million after one year, an additional $500 million after two years, and $400 million after three years, James said.
In addition, the Sacklers will no longer control Purdue. A board of trustees selected by participating states in consultation with the other creditors will determine the future of the company. Purdue will continue to be overseen by a monitor and will be prevented from lobbying or marketing opioids under the settlement.
Purdue is the company that made and marketed OxyContin, a powerful prescription painkiller that was abused and fueled addiction in people across the country. The company was accused of illegally marketing OxyContin, deliberately downplaying its risks while overstating its benefits, and enticing physicians to overprescribe.
“We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis, and deliver treatment and overdose rescue medicines that will save lives,” Purdue said in a statement. “We have worked intensely with our creditors for months in mediation, and we are now focused on finalizing the details of a new Plan of Reorganization, which we look forward to presenting to the bankruptcy court.”
The deal has not been accepted by all the creditors. New York and 14 other states involved in talks signed on, including Florida, Connecticut, Massachusetts, Tennessee, California and West Virginia.
