A U.S. Bankruptcy Court judge is set to give his reasoning Tuesday for the approval of Purdue Pharma’s plan to settle thousands of lawsuits regarding the impact of opioids.
The settlement means members of the Sackler family, who own Purdue, will contribute up to $7 billion over the coming years.
Judge Sean Lane indicated last week he would accept the plan, which could emerge as one of the largest opioid settlements to date, marking a shift as it will directly compensate some victims of the crisis.
Distribution of Funds
The Sackler family has agreed to a $7 billion payout over 15 years, which will primarily be allocated to state, local, and Native American groups to combat the opioid crisis, alongside a significant sum directed towards individual victims. This includes approximately $850 million designated for personal claims from individuals affected by opioid addiction, with compensation amounts ranging based on individual circumstances.
Victims who demonstrate they were prescribed OxyContin can claim payments estimated at $8,000 to $16,000 based on the length of their prescription and the number of claimants.
Ownership Transition
As part of this settlement, the Sackler family will also relinquish control over Purdue Pharma. However, their change in ownership is somewhat nominal, given they have not participated in the company's management or received funding since 2018. Purdue Pharma will transform into Knoa Pharma under a new board that will be appointed to prioritize public benefit.
The Sacklers have also consented to not have their names associated with any institutions in the future, a practice they have frequently engaged in. Additionally, Purdue has agreed to publicize internal documents that might provide more insight into opioid marketing strategies.
Legal Proceedings Ahead
The road to this settlement has been tumultuous. Purdue filed for bankruptcy protection in 2019 amid numerous opioid-related lawsuits. Although a judge initially approved a settlement plan, the U.S. Supreme Court later rejected it for granting the Sacklers immunity from lawsuits without declaring personal bankruptcy.
The current proposed plan leaves open the possibility for legal action against the Sackler family by any party that opts out of the settlement, addressing concerns raised during the recent three-day confirmation hearing.
