All 50 U.S. states have agreed to Purdue Pharma's latest proposal to settle thousands of lawsuits related to the opioid crisis. A judge is currently being asked to allow local governments and individual victims to vote on the settlement. Members of the Sackler family, owners of the company, are set to pay up to $7 billion over a span of 15 years as part of this settlement.
If endorsed, this settlement would constitute one of the largest in a series of lawsuits that have emerged over the last decade. Governments and various entities have been seeking accountability from drug manufacturers, wholesalers, and pharmacies due to the opioid epidemic, which intensified following the introduction of OxyContin in 1996. Other settlements related to the crisis have a combined value of approximately $50 billion, with the majority of the funds earmarked for combating the opioid epidemic.
In the early 2000s, opioid-related deaths were predominantly associated with prescription medications, OxyContin being a significant contributor. Over time, heroin and illicitly produced fentanyl became the leading causes of overdose deaths. In certain years, opioids were linked to over 80,000 fatalities, although that figure saw a notable decrease in the past year.
The request made by U.S. Bankruptcy Court Judge Sean Lane closely follows a year after the U.S. Supreme Court rejected a previous iteration of Purdue's proposed settlement. The Supreme Court ruled that the earlier settlement improperly shielded Sackler family members from being held accountable in lawsuits related to opioids, despite them not filing for bankruptcy protection themselves.
The restructured settlement plan, developed in collaboration with attorneys representing state and local governments, ensures that groups opting not to participate in the settlement retain the right to pursue legal action against the Sackler family. If approved, this plan would result in Sackler family members relinquishing their ownership of Purdue Pharma. They have already resigned from the company's board and ceased receiving distributions from its funds prior to the company’s initial bankruptcy filing in 2019.
The reformed entity will adopt a new name, with its future profits directed towards fighting the opioid epidemic. A significant portion of the settlement money will be allocated to state and local governments to tackle the addiction and overdose crisis across the nation. Notably, over $850 million is expected to be distributed directly to individual victims, making this settlement distinct from other previous major settlements.
The financial disbursements from this agreement will not commence until after a hearing scheduled for November 10. During this hearing, Judge Lane will be asked to approve the overall settlement plan if a sufficient number of affected parties agree to its terms.
The ongoing opioid crisis has had a profound impact on communities across the United States, prompting significant legal and financial ramifications for pharmaceutical companies involved in the marketing and distribution of these drugs. This latest plan represents a critical step toward addressing the widespread addiction and its devastating consequences.
