Judge approves Purdue opioid settlement

A bankruptcy judge approved an agreement settling the thousands of lawsuits against Purdue for its role in the opioid crisis.

Reminder: The Supreme Court rejected an earlier version of the deal last year. It said that the immunity from future opioid lawsuits guaranteed to Purdue in bankruptcy should not be extended to members of the Sackler family, who did not declare bankruptcy.

• The case has underscored how bankruptcy court is an insufficient venue to deliver the justice many were seeking.

The details:

• Purdue will immediately contribute $900 million and then be dissolved. The company will be reborn as Knoa Pharma, a public benefit company that will manufacture limited quantities of opioid painkillers and opioid overdose reversal medications, with profits going to programs to remediate the opioid crisis.
• Members of the Sackler family will be required to pay as much as $7 billion over 15 years and give up ownership of the company. They will also be required to give up involvement in companies that sell opioids in other countries and will be barred from having their names added to institutions in exchange for charitable contributions.
• The Sacklers will not have complete immunity from future opioid lawsuits. Entities who do not opt into the settlement can still sue the Sacklers in the future. But the deal gives the Sacklers a reserve legal fund to fight such cases, which will be funded by the Sacklers withholding $200 million from payments to states. If that money is drawn down, the fund must be replenished, up to $800 million. Any money that remains unused after 5 years reverts to the states.
• Company documents will be made public.
• Individuals harmed by Purdue’s products will have about $850 million set aside for them, with more than $100 million of that carved out to help children born with opioid withdrawal. Lawyers expect that those who can prove they had Purdue opioid prescriptions would receive about $8,000-$16,000, before legal fees.
• State and local governments will receive most of the money, to be used in their efforts to address the opioid crisis.
• Federally recognized tribes are expected to receive $175 million from Purdue/the Sacklers on a separate track.

Next steps: Payments could begin in Spring 2026.

The response:

• The groups suing (states, localities, individuals, etc.) reached a more full consensus around this agreement, nearly unanimously recommending that the judge approve the deal.
• A handful of objectors spoke at a hearing last week, with some saying that only the individual victims, not the states and other government entities, should receive funds in the settlement. Others wanted the judge to find the Sacklers criminally liable, something the judge said is beyond the scope of bankruptcy court, but that the settlement does not bar prosecutors from pursuing.

Why it’s important:

• The Purdue deal would be among the largest of the opioid settlements, providing critical funding to states and localities to address the opioid crisis.
• Unlike the other major opioid settlements, this agreement has money set aside for individual victims.

Read more: Opioid settlement with OxyContin maker Purdue and Sackler family could end years of legal battles; Judge says he’ll approve opioid settlement with OxyContin maker Purdue and Sackler family; Judge to Approve Purdue Pharma Bankruptcy, Releasing Billions for Opioid Plaintiffs; Here’s what’s in the opioid settlement against OxyContin maker Purdue and the Sackler family