The filing is a milestone in a bankruptcy court saga that’s gone on for more than five years.
Purdue Pharma has presented a revised plan to a bankruptcy judge in an effort to resolve numerous lawsuits related to OxyContin, a potent prescription painkiller. The proposed settlement includes a provision for the Sackler family, who owns the company, to contribute up to $7 billion.
The filing is a milestone in a tumultuous legal saga that has gone on for more than five years.
As part of the agreement, family members would relinquish control of the company and make financial contributions over a 15-year period, with a significant initial payment. Records indicate that the Sackler family, valued at approximately $11 billion between 2020 and 2021, would be required to comply with these terms.
Prior to Purdue Pharma seeking bankruptcy protection in 2019 due to the deluge of legal actions from numerous governmental entities, the family members had already stepped down from the company’s board, ended their financial ties to the firm, and ceased any other affiliations.
The new entity would be run by a board appointed by state governments, and its mission will be to abate the opioid crisis that has been linked to hundreds of thousands of deaths in the U.S. since OxyContin hit the market in 1996. The first wave of deadly overdoses were tied to OxyContin and other prescription drugs, and subsequent waves have involved first heroin and more recently illicit versions of fentanyl.
This settlement plan was hammered out in months of mediation involving groups that sued Purdue, and nearly all of them are supporting it, according to mediator reports filed in court.
Approval would take at least several more months.
A previous version had bankruptcy court approval but was rejected last year by the U.S. Supreme Court because it protected members of the Sackler family from civil lawsuits even though none of them filed for bankruptcy protection themselves.
Under the new version, plaintiffs will have to opt in to get full shares of the settlement. If they do not, they can still sue Sackler family members, who agreed to put in about $1 billion more than under earlier plans. The Sacklers’ cash contribution would depends in part on how many parties join the settlement and on the sale of foreign drug companies. Some of the money they put into the settlement is to be reserved to pay any judgments if they are sued and lose; but if that doesn’t happen, it’s to go into the main settlement.
Members of the family have been cast as villains and have seen their name removed from art galleries and universities around the world because of their role in the privately held company. They continue to deny any wrongdoing.
Other drugmakers, distribution companies, pharmacy chains and others have already reached opioid lawsuit settlements worth about $50 billion, according to an Associated Press tally. Purdue’s, which would also include about $900 million from company coffers, would be among the largest if finalized.
The deals require most of the money be used to fight the opioid crisis.
Purdue’s is the only major one that also provides direct money for victims — potentially more than $850 million total in pools for people who became addicted, their families and babies born in withdrawal. That figure is more than in the previous incarnation.
The deadline to apply for a piece of those funds passed years ago. In earlier versions, individuals were expected to receive between about $3,500 and $48,000. Families were split over the deal.
Purdue would also provide millions of documents to a repository that would make them public. The company has also been producing a low-cost version of naloxone, a drug that reverses overdoses.
