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The Sackler family and the opioid maker they founded, Purdue Pharma, have jointly agreed to pay $7.4 billion to settle liabilities related to their role in the opioid crisis, ending months of negotiations after an earlier deal had failed.
The latest agreement, which still requires bankruptcy court approval, is $1.4 billion higher than the previous agreement between the parties. The new settlement was reached with more than a dozen states and other individuals who had filed lawsuits against the company. Under the agreement, the Sackler family will pay $6.5 billion over the next 15 years Purdue will pay $900 million.
But while attorneys general across the country touted the deal’s potential multibillion-dollar payouts, the exact details of how the payouts would be structured are not known. Those details include whether opioid victims will be allowed to continue suing Sackler’s family members in the future and the extent to which the family will be protected from such litigation – two sticking points in the previous agreement.
A 50-page term sheet detailing the full picture could be released as early as next week, a person familiar with the mediation process said. Without this document, the question also remains as to how much of the $7.4 billion will be distributed to victims and reconstruction programs.
Until recently, a member of the Sackler family had not signed the settlement. But in a court filing Monday, mediator Shelley Chapman wrote that the member had finally been brought on board, laying the groundwork for “several other important aspects of the mediation to move forward.”
The drugmaker initially filed for bankruptcy in a New York federal court in 2019 to manage lawsuits over its role in the industry Opioid crisis.
“Families across New York and across the country are suffering the immense pain and loss brought about by the opioid crisis,” New York Attorney General Letitia James, one of the officials who helped broker the deal, said Thursday. “While no amount of money can ever fully repair the damage they have caused, this massive influx of money will bring resources to communities in need so we can heal.”
In 2020, Purdue agreed to an $8 billion settlement with the Justice Department in which the company pleaded guilty to three counts of federal crimes. As part of the settlement, the company admitted to marketing OxyContin to medical personnel suspected of diverting opioids, giving kickbacks to doctors to write more prescriptions, and persuading them to write prescriptions for illegitimate reasons.
The latest settlement with Purdue is one of the largest potential payouts from the U.S. opioid crisis, which has led to more than 600,000 deaths since 1999, according to the Centers for Disease Control and Prevention. About 140,000 personal injury victims could benefit from the deal, according to court documents.
The U.S. Supreme Court last summer rejected a $6 billion deal previously agreed between the Sackler family and creditors that was largely negotiated during the pandemic. The agreement was based on protecting family members from future lawsuits, which the high court ruled was impermissible without the family members having to file for bankruptcy themselves.
“What the Sacklers want — what everyone wants when you settle something — is to be done with it,” said Bruce Markell, a law professor at Northwestern University, referring to protection from future liabilities. “Many Sacklers have benefited from this. There were children born after Purdue filed for bankruptcy who are probably still benefiting from the generosity.”
According to the New York attorney general’s office, the new deal is structured so that the Sacklers will not automatically be protected from liability. However, victims must agree not to take any further legal action in order to receive a payout.
After the Supreme Court’s decision, lawyers and companies had to decide how to resolve so-called “mass torts,” in which companies’ product liability claims amount to thousands of victims and hundreds of millions or even billions of dollars.
The funds provided by the Sacklers and Purdue will be used to fund opioid addiction treatment and recovery programs over the next 15 years, the Texas Attorney General’s Office said. Critical to many victims is that as part of the deal, members of the Sackler family will no longer be allowed to sell opioids in the United States and their ownership of Purdue will end.
The Sackler family did not respond to a request for comment.
