Purdue Pharma has secured broad support from attorneys general across 55 U.S. states and territories for its $7.4 billion settlement to resolve thousands of opioid lawsuits against the drugmaker and the Sackler family, its owners. The agreement represents a significant step toward resolving claims that Purdue's pain medication OxyContin fueled the nationwide opioid addiction crisis.
Settlement Structure and Timeline
The $7.4 billion payment comprises approximately $6.5 billion from the Sackler family and about $900 million from Purdue Pharma. According to New York Attorney General Letitia James, who led the settlement negotiations, payouts would begin after the drugmaker wins sufficient creditor support for its Chapter 11 bankruptcy reorganization plan.
Under the agreement, Purdue's $900 million contribution and the Sackler family's first installment of $1.5 billion would be paid in early 2026. The settlement framework, initially announced in January by James and other states, creates a structure to deliver funding directly to communities affected by the opioid crisis over the next 15 years.
Key Differences from Previous Settlement
This settlement marks a crucial departure from an earlier $6 billion agreement that the U.S. Supreme Court rejected in June 2024. The previous settlement would have provided the Sacklers with broad immunity from opioid-related civil lawsuits, a provision that has been removed from the current agreement.
"For decades, the Sacklers put profits over people, and played a leading role in fueling the epidemic," James stated. "While no amount of money can fully heal the destruction they caused, these funds will save lives and help our communities fight back against the opioid crisis."
Distribution and Beneficiaries
The settlement funds will be distributed to multiple parties, including individuals affected by opioid addiction, state and local governments, and Native American tribes. The agreement also stipulates that the Sackler family will be removed from the opioid business in the United States and will cede control of Purdue Pharma.
Oklahoma is notably absent from this settlement, having reached a separate $270 million agreement with Purdue Pharma and the Sacklers in 2019 to resolve its opioid-related claims.
Opioid Crisis Impact
The opioid epidemic has had devastating consequences across the United States. According to the Centers for Disease Control and Prevention, more than 850,000 Americans have died from opioid-related overdoses since 1999. The crisis began with prescription opioids in the late 1990s, with deaths rising from 3,442 in 1999 to a peak of 17,029 in 2017.
The epidemic evolved as efforts to restrict prescription opioids led to increased heroin use, followed by the emergence of synthetic fentanyl, which accounted for 73,838 deaths in 2022 out of the nation's total 107,941 drug overdose deaths that year.
Industry Response and Next Steps
Purdue Pharma expressed satisfaction with the agreement in a statement, noting that the company has "worked intensely with our creditors for months in mediation" and is now focused on finalizing details of a new Plan of Reorganization to present to the bankruptcy court.
This settlement adds to previous agreements with drug distributors and a $650 million settlement with McKinsey and Company for its role in helping Purdue Pharma boost OxyContin sales. The broad state support announced could significantly help Purdue Pharma win court approval for its bankruptcy reorganization and move forward with the compensation process for affected communities and individuals.
