The Sackler family and Purdue Pharma, the opioid manufacturer they established, have reached an agreement to pay $7.4 billion to resolve liabilities related to their involvement in the opioid epidemic. This settlement concludes several months of negotiations following the collapse of a prior agreement.
This new settlement, which is subject to bankruptcy court approval, exceeds the previous deal by $1.4 billion. It was negotiated among more than twelve US states and other parties who had initiated lawsuits against the company.
Purdue Pharma filed for bankruptcy in 2019 to address numerous lawsuits concerning its role in the crisis. Under the terms of the new agreement, the Sackler family is set to pay $6.5 billion over the next 15 years, while Purdue Pharma will contribute $900 million.
New York Attorney General Letitia James, who played a role in the negotiations, remarked that families in New York and across the nation are enduring significant suffering due to the opioid crisis. She emphasized that while monetary compensation cannot fully rectify the harm caused, the financial resources will support communities in healing.
This settlement represents one of the largest potential payouts related to the opioid crisis in the United States, which has resulted in over 600,000 fatalities since 1999, as reported by the Centers for Disease Control and Prevention.
Previously, a $6 billion settlement between the Sacklers and creditors was invalidated by the US Supreme Court last summer. The Supreme Court found that protecting family members from future lawsuits without their own bankruptcy filing was not permissible.
The newly structured agreement does not automatically shield the Sacklers from liabilities. However, victims must agree to refrain from pursuing further legal action in order to receive compensation, according to statements from the New York Attorney General’s office.
The Supreme Court ruling prompted legal experts and companies to reevaluate approaches to resolving so-called “mass torts,” involving extensive corporate product liability claims affecting thousands of victims and potentially totaling billions of dollars.
The funds from the Sacklers and Purdue will be allocated over the next 15 years to support addiction treatment and recovery initiatives, as stated by the Texas Attorney General’s office.
Significantly, as part of the settlement, the Sackler family is prohibited from selling opioids in the US, and their ownership of Purdue Pharma has ceased.
The Sackler family has not yet responded to inquiries regarding the settlement.
photo credit: www.ft.com
