Members of the Sackler family, owners of Purdue Pharma, are required to pay up to $7 billion over 15 years as part of a settlement to resolve numerous lawsuits related to the opioid crisis. This agreement was formally approved by U.S. Bankruptcy Judge Sean Lane on Tuesday.
Most of the settlement funds will be allocated to government entities for efforts against opioid addiction and its consequences. The opioid epidemic has been linked to approximately 900,000 deaths in the United States since 1999. Thousands of individuals who were prescribed OxyContin or their survivors may receive compensation, with distributions expected to begin next year.
“This plan is not perfect,” said Judge Lane during his approval of the deal. “The court wishes it could do more to ease the suffering of the opioid crisis.” He described the settlement as equitable and in the best interests of those with claims against Purdue, noting that it had broad support among stakeholders.
This new agreement replaces a previous proposal rejected by the U.S. Supreme Court last year because it would have shielded Sackler family members from future lawsuits. Under the current arrangement, parties who do not opt into payment distributions retain their right to sue members of the Sackler family.
The Purdue Pharma case is one of several large settlements related to opioids involving drugmakers, distributors, and pharmacies that together amount to about $50 billion nationwide.
Judge Lane stated that pursuing further litigation against the Sacklers would offer less certainty and could result in lower recoveries due to challenges in accessing their wealth held in offshore trusts. He also explained that liquidating Purdue would yield only $3.4 billion for claimants—significantly less than what this settlement provides—and most federal penalties tied to criminal pleas would be waived if a broader agreement was reached.
Sackler family members received over $10 billion from Purdue before ending involvement with the company in 2018; roughly half went toward taxes. Under this deal, they will contribute most of the agreed-upon $7 billion settlement sum. Like other opioid-related settlements, these funds must primarily address opioid-related needs at state and local levels and among Native American tribes. About $850 million is reserved for individual victims—including children born with withdrawal symptoms due to prenatal exposure.
To qualify for individual payments, participants must provide documentation proving they were prescribed OxyContin—a process complicated by potentially missing records from years past. Those able to meet requirements may receive between $8,000 and $16,000 depending on prescription duration and number of qualifying applicants; payments are scheduled for next year.
In addition to financial terms, ownership of Purdue will transfer away from the Sacklers—who have not been involved since 2018—to a new entity called Knoa Pharma overseen by a board appointed by states and tasked with serving public interests.
The Sacklers have also agreed not to seek naming rights at institutions as part of donations—a practice many organizations have already distanced themselves from—and internal company documents related to opioid promotion will be made public.
A provision from an earlier version requiring Sackler family members hear directly from those harmed by OxyContin has been omitted from this final agreement.
Purdue filed for bankruptcy protection in 2019 amid thousands of lawsuits regarding its role in marketing opioids; an initial settlement was struck down by the Supreme Court because it protected non-bankrupt individuals (the Sacklers) from further suits. The current plan avoids this issue by preserving plaintiffs’ rights unless they accept payment under its terms.
While few objections were raised during recent hearings, some victims representing themselves voiced concerns about payout sizes or indicated plans for appeal after Tuesday’s ruling.
Kay Scarpone from New Hampshire participated on a creditors committee following her son’s overdose death: “take what you can get from the Sackler family and do the best thing you can do, which is get money into the hands of the victims.” She anticipates disappointment among some recipients once actual payment amounts become clear.
Susan Ousterman of Pennsylvania described her reaction after losing her son as disheartened: “how complicit the system is.”
