The billionaire family that owns Purdue Pharma, the maker of OxyContin, will receive immunity from all current and future civil claims over the company’s role in the opioid crisis as part of a deal approved by a federal appeals court on Tuesday.
The U.S. Court of Appeals for the 2nd Circuit cleared the way for a settlement that would see the Sackler family pay up to $6 billion from its massive fortune derived from the painkiller business. Purdue Pharma has faced years of criticism that it helped fuel the opioid crisis in America, aggressively marketing OxyContin while misleading the public about the highly addictive pills.
The company filed for bankruptcy in 2019 amid a crush of lawsuits, but the massive settlement had been held up after a judge said in 2021 that the Sacklers, who didn’t file for bankruptcy themselves, couldn’t be protected from liability. States, local governments and those affected by the spread of opioids had grown frustrated after waiting years to see money disbursed to communities to help treat addiction and fund prevention programs while the crisis has only grown, now fueled by a surge in fentanyl use.
Tuesday’s decision could finally resolve those cases, despite initial frustration surrounding the immunity deal.
Under the plan, Purdue will be dissolved and restructured into a new entity known as Knoa Pharma. The company will be overseen by a public board and will manufacture medications for addiction treatment, as well as OxyContin, with the profits used to fund programs that prevent and treat addiction itself. Those profits could total in the hundreds of millions of dollars over time.
About $750 million from the settlement will go to families and individuals affected by the opioid crisis. Payments are expected to range from about $3,500 to $48,000.
Connecticut Attorney General William Tong accused the Sacklers of “cravenly” hiding behind the country’s bankruptcy code on Tuesday. He added that, although the state was frustrated with the immunity protections, the settlement will ultimately give “direct relief to families of victims and survivors of addiction.”
“There’ll never be enough justice to match the depths of pain and suffering the Sackler family caused,” Tong said in a statement. “But we recognized that we had pushed this as far as we could, and that it was necessary to get communities, victims and their families the resolution and billions of dollars funding desperately needed to save lives and fight the opioid epidemic.”
The settlement could be appealed to the U.S. Supreme Court, but that outcome is unlikely as almost all parties have signed on to the deal. The protections for the Sacklers do not extend to any criminal prosecutions that could arise in the future.
The families of the two brothers who founded Purdue said Tuesday they were pleased with the decision and “look forward to it taking effect as soon as possible.”
“The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need,” the statement said.
Other drug manufacturers and pharmacy chains have faced other lawsuits for their ties to the opioid crisis. CVS and Walgreens announced their own settlements last year totaling $10 billion after years of litigation.