Purdue Pharma’s Revised Bankruptcy Plan Offers Billions for Opioid Crisis Victims

Purdue Pharma’s Revised Bankruptcy Plan Offers Billions for Opioid Crisis Victims

Purdue Pharma has submitted a new bankruptcy settlement plan, proposing over $7.4 billion in compensation, including up to $7 billion from the Sackler family, to help victims of the opioid epidemic. The plan comes nine months after the U.S. Supreme Court struck down a previous agreement and marks a significant shift in the legal battle surrounding the pharmaceutical giant.

 

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Key Details of the New Settlement

Sackler Family Contributions & Payout Structure

• The billionaire Sackler family will pay up to $7 billion, with an initial $1.5 billion upfront payment.
• Additional $6.5 billion will be paid in installments over the next 15 years.
• An extra $500 million could be added if the sale of the Sacklers’ international pharmaceutical holdings surpasses a certain valuation.

Purdue Pharma’s Transformation

• Purdue Pharma will be dissolved, and its assets will be transferred to a new public benefit company.
• The Sacklers will have no ownership or control over the new entity.
• The new company will focus on combating the opioid crisis and improving public health, with governance overseen by state-appointed officials.

Creditors Have a Choice

• Victims and states can opt-in to receive settlement funds or opt-out and retain the right to sue members of the Sackler family individually.
• If all eligible claimants opt-in, the full $7.4 billion will be distributed.

Purdue’s Contribution

• Purdue will provide all its remaining assets, including $900 million in cash, toward the settlement.

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How Does This Plan Differ From the Previous One?

Stronger Legal Protections for Victims

• The previous $6 billion settlement, blocked by the Supreme Court in 2024, would have shielded the Sackler family from further civil lawsuits.
• Under the new plan, victims retain the right to sue if they choose not to opt into the settlement.

Supreme Court’s Rejection of the Old Plan

• In a 5-4 ruling, Justice Neil Gorsuch struck down Purdue’s previous proposal, stating, “Nothing in present law authorizes the Sackler discharge.”
• The revised plan removes automatic legal protections for the Sacklers, making it more legally viable.

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Financial Impact on the Sackler Family

Net Worth Decline

• The Sackler family’s fortune was estimated at $10.8 billion in 2020 but fell to $5.2 billion in early 2024.
• If this settlement is fully paid, their remaining wealth will shrink even further.

No Longer Involved in Purdue Pharma

• The Sacklers left Purdue’s board in 2018 and claim they had no involvement in the company’s operations since then.

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Background: Purdue Pharma & the Opioid Crisis

OxyContin’s Role in the Epidemic

• Purdue Pharma, the maker of OxyContin, has faced numerous lawsuits for its role in the opioid crisis, which has contributed to hundreds of thousands of overdose deaths.
• The Sackler family has been accused of aggressively marketing OxyContin, despite knowing the risks of addiction.

Legal Battles & Previous Settlements

• Purdue declared bankruptcy in 2019 after facing lawsuits from multiple states.
• The initial 2021 settlement proposal was for $4.5 billion, later increased to $6 billion, but was rejected in 2024.

Sackler Family’s Defense

• The Sacklers deny wrongdoing, stating they acted lawfully in all respects and that OxyContin unexpectedly became part of the opioid crisis.

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What’s Next?

Approval Process

• The plan requires approval from the bankruptcy court and widespread creditor participation.
• Legal experts believe it has a stronger chance of approval due to its opt-out provision.

Compensation for Victims

• $850 million will go directly to individual victims of opioid addiction, including:
  Patients who became addicted to OxyContin.
  Children born with opioid withdrawal symptoms.

The Future of Purdue’s Public Benefit Company

• If approved, the new company will focus on funding addiction treatment and opioid crisis prevention efforts.

Stay tuned for updates as the legal battle unfolds!