OxyContin maker files new bankruptcy plan, including up to $7 billion from Sackler family
(WJET/WFXP) — Purdue Pharma asked a bankruptcy judge late Tuesday to consider the latest version of its plan to settle thousands of lawsuits over the toll of the powerful prescription painkiller OxyContin, a deal that would have members of the Sackler family — who own the company — pay up to $7 billion.
The filing is a milestone in a tumultuous legal saga that has gone on for more than five years.
Under the deal, the family members — estimated in documents from 2020 and 2021 to be worth about $11 billion — would give up ownership of the company and contribute money over 15 years, with the biggest payment upfront.
Family members resigned from Purdue's board, stopped receiving money from the company and ceased other involvement before the bankruptcy protection filing in 2019 as the company faced lawsuits from thousands of state and local governments, plus others.
The new entity would be run by a board appointed by state governments, and its mission would 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.
The plan will also create a repository that will make millions of documents related to Purdue's historical sales and marketing practices available to the public, which they say will be significantly larger than the entire tobacco industry repository.
The company has also been producing a low-cost version of naloxone, a drug that reverses overdoses.
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 depend 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.
The Associated Press contributed to this report.
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Newsweek
14 hours ago
- Newsweek
How Opioid Settlement Could Change Sackler Family Net Worth
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. After Purdue Pharma agreed to a $7.4 billion settlement, the Sackler family, the company's founders, could see a hit to their net worth. The company announced its settlement with all 55 attorneys general on Monday after longstanding allegations the company and the Sacklers played a role in creating and worsening the opioid crisis in America. Why It Matters Nearly 100,000 people die from opioids every year, making up the bulk of drug overdoses in the U.S. Across the country, Connecticut, New York, California, Colorado, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and West Virginia led in negotiating the settlement agreement with Purdue Pharma and the Sacklers for their involvement in the opioid crisis. Purdue Pharma headquarters stands in downtown Stamford, April 2, 2019 in Stamford, Connecticut. Purdue Pharma headquarters stands in downtown Stamford, April 2, 2019 in Stamford, To Know This settlement, reached with all 50 states, Washington, D.C., and U.S. territories, requires the Sacklers to relinquish ownership of Purdue Pharma and bars them from engaging in future opioid sales in the country. The deal represents the largest settlement to date involving individuals held responsible for the opioid epidemic, which has resulted in significant financial and reputational consequences for the Sackler family. The $7.4 billion settlement also comes alongside a commitment by the company to dissolve and transfer its assets to a new company. The Sacklers will also have no ownership interest or role in the new company, consistent with how they've had no involvement in Purdue since the end of 2018, the company said. "Today, every single attorney general, representing all states and territories nationwide, has signed onto an historic settlement that permanently ends the Sacklers' control over Purdue and their ability to ever sell opioids again, and forces the company and the family to pay $7.4 billion for their role in igniting one of the most devastating public health crises in American history," Connecticut Attorney General William Tong said in a statement. That amount is $1.4 billion more than the settlement reached in 2022, and $3.1 billion more than the settlement Connecticut rejected in 2021. "I will continue to urge that the millions of dollars Connecticut receives be used to save lives through opioid treatment and prevention, as well as to provide direct support to victims and their families," Tong said. The settlement alleges that Purdue, while owned by the Sacklers, aggressively marketed opioid products for decades, leading to the opioid epidemic on a larger scale. The money will go toward local communities to support addiction treatment and prevention. In the first payment, the Sacklers are set to pay $1.5 billion, with Purdue paying another $900 million for affected communities. The company will then be responsible for paying $500 million the next year, another $500 million in two years and $400 million after three years. "What's interesting about the $7.4 billion Purdue Pharma settlement is that it's entirely being funded by the company and the Sackler family, unlike other opioid settlements that involved intermediaries like Walmart, CVS, and distributors," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. "One of the biggest shifts here was the Supreme Court blocking the Sackler's from using bankruptcy protection, forcing them to pay directly. That decision alone changes the stakes for both accountability and restitution." The total value of the settlement is scheduled for distribution over 15 years, and the funds will primarily support opioid addiction prevention, treatment, and recovery initiatives nationwide. The Sackler family members included in the settlement include the eight heirs of Purdue founders Raymond and Mortimer Sackler who served on the Board of Purdue: Richard, Kathe, Mortimer Jr., Ilene, David, and Theresa Sackler as well as the estates of Jonathan and Beverly Sackler. While the Sacklers have denied any wrongdoing, the settlement strips them of ownership and control of Purdue Pharma, which will be restructured as a public benefit corporation. Profits from the restructured company will be directed exclusively to address the opioid crisis rather than private owners. This move significantly alters the family's involvement—and revenue—from the pharmaceutical sector. Purdue Pharma, under Sackler family leadership, introduced and promoted OxyContin beginning in the 1990s, aggressively marketing opioid products and facing mounting legal challenges as overdose deaths and addiction rates soared across the United States. What Is The Sackler's Net Worth? The new settlement increases a previous offer overturned by the Supreme Court from $6 billion to $7.4 billion, emphasizing both the financial and legal pressure on the Sackler fortune. Although the payments are substantial, details on the family's exact remaining wealth after settlement disbursements have not been disclosed by the parties involved. As of 2024, the family's collective net worth was estimated at $10.8 billion. "This ruling is a massive blow," Thompson said. "Their assets are now being tapped for restitution to the millions of victims, which will severely impact their liquid net worth which is reported to be roughly $11 billion." Newsweek reached out to Purdue Pharma and the Sackler family via email. What People Are Saying Purdue Board Chairman Steve Miller said in a statement: "Following the 2024 Supreme Court ruling, we doubled down on our commitment to work with our creditors to design a new Plan that delivers unprecedented value to those affected by the opioid crisis. Today's filing is a major milestone in that effort. We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good. Connecticut Attorney General William Tong said in a statement: "There will never been enough justice, accountability or money to restore the families whose lives have been wrecked or to right the terrible consequences of the Sackler family's craven misconduct. What we announce today is both momentous and insufficient, the culmination of years of tumultuous negotiations and legal battles all the way up to the U.S. Supreme Court." What Happens Next The local government sign-on and voting solicitation process for the settlement will depend on bankruptcy court approval. A hearing is scheduled in the coming days. "The settlement could hopefully mark the beginning of a shift in the war against the epidemic, as funding would not only be available to thousands of victims who filed lawsuits, but those dollars could also be used to back prevention and recovery programs nationwide," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
a day ago
A judge could advance Purdue Pharma's $7B opioid settlement after all 50 states back it
All 50 U.S. states have agreed to the OxyContin maker Purdue Pharma 's latest plan to settle thousands of lawsuits over the toll of opioids. A judge on Wednesday is being asked to clear the way for local governments and individual victims to vote on it. Government entities, emergency room doctors, insurers, families of children born into withdrawal from the powerful prescription painkiller, individual victims and their families and others would have until Sept. 30 to vote on whether to accept the deal, which calls for members of the Sackler family who own the company to pay up to $7 billion over 15 years. If approved, the settlement would be among the largest in a wave of lawsuits over the past decade as governments and others sought to hold drugmakers, wholesalers and pharmacies accountable for the opioid epidemic that started rising in the years after OxyContin hit the market in 1996. The other settlements together are worth about $50 billion, and most of the money is to be used to combat the crisis. In the early 2000s, most opioid deaths were linked to prescription drugs, including OxyContin. Since then, heroin and then illicitly produced fentanyl became the biggest killers. In some years, the class of drugs was linked to more than 80,000 deaths, but that number dropped sharply last year. The request of U.S. Bankruptcy Court Judge Sean Lane comes about a year after the U.S. Supreme Court rejected a previous version of Purdue's proposed settlement. The court found it was improper that the earlier iteration would have protected members of the Sackler family from lawsuits over opioids, even though they themselves were not filing for bankruptcy protection. Under the reworked plan hammered out with lawyers for state and local governments and others, groups that don't opt in to the settlement would still have the right to sue members of the wealthy family whose name once adorned museum galleries around the world and programs at several prestigious U.S. universities. Under the plan, the Sackler family members would give up ownership of Purdue. They resigned from the company's board and stopped receiving distributions from its funds before the company's initial bankruptcy filing in 2019. The remaining entity would get a new name and its profits would be dedicated to battling the epidemic. Most of the money would go to state and local governments to address the nation's addiction and overdose crisis, but potentially more than $850 million would go directly to individual victims. That makes it different from the other major settlements. The payouts would not begin until after a hearing scheduled for Nov. 10, during which Lane is to be asked to approve the entire plan if enough of the affected parties agree.
Washington Post
a day ago
- Washington Post
A judge could advance Purdue Pharma's $7B opioid settlement after all 50 states back it
All 50 U.S. states have agreed to the OxyContin maker Purdue Pharma 's latest plan to settle thousands of lawsuits over the toll of opioids . A judge on Wednesday is being asked to clear the way for local governments and individual victims to vote on it. Government entities, emergency room doctors, insurers, families of children born into withdrawal from the powerful prescription painkiller, individual victims and their families and others would have until Sept. 30 to vote on whether to accept the deal, which calls for members of the Sackler family who own the company to pay up to $7 billion over 15 years.
