New Purdue bankruptcy deal cuts out Sacklers’ legal immunity

Fifteen US states have reached a $7.4 billion (£6 billion) settlement-in-principle with Purdue Pharma and the Sackler family who own it. It looks to replace the 2021 settlement rejected by the US Supreme Court in June 2024 on grounds it broke bankruptcy law by giving the Sacklers blanket immunity from civil lawsuits, despite the fact that it was the company, not the Sacklers, filing for bankruptcy. The new settlement includes no automatic immunity for the Sacklers.

Purdue was instrumental in creating the US opioid crisis via aggressive marketing that did not reflect the true addiction risks of its drugs, particularly OxyContin (oxycodone). Many other creditors still need to agree the deal, including local communities and individuals with legal claims against the Sacklers.

If the settlement is approved by the US Bankruptcy Court for the Southern District of New York, and remains in place after any appeals, the Sacklers will finally lose control of Purdue. Cash will be delivered directly to communities over the coming 15 years to support opioid addiction treatment and prevention, and pay for recovery programmes. This, the states said, represents the largest US settlement to date regarding the opioid crisis.

In the first three years, the Sacklers will pay almost $3 billion, and Purdue $900 million. Importantly, the Sacklers’ control of Purdue will end, and they will be banned from selling opioids in the US. A board of trustees selected by the participating states will determine the company’s future.

The Sacklers’ contribution would increase to a total $6.5 billion from the $6 billion in the previous settlement. However, there is a new condition in lieu of the legal immunity the Sacklers were seeking, according to the New York Times. Any claimants, whether states, local municipalities or individuals, would have to set aside as much as $800 million (in total) in an account that would, effectively, be a legal defence fund to help the Sacklers fight future lawsuits.

Details of how this might work were not immediately available, but with many individuals and organisations potentially suing, it might not go very far. Purdue originally filed for bankruptcy in 2019, with a huge amount of litigation pending. These lawsuits alleged that Purdue executives deceived both doctors and the public that the drugs were not addictive, leading to higher doses being prescribed for longer periods. The litigation was put on hold after the bankruptcy filing.

If the settlement is approved, more than 30 million documents relating to Purdue and the Sacklers’ opioid business will be made public. This includes communications about the US Food and Drug Administration’s original approval of OxyContin and marketing tactics that were previously subject to attorney-client privilege.

‘The Sackler family relentlessly pursued profit at the expense of vulnerable patients, and played a critical role in starting and fuelling the opioid epidemic,’ said New York attorney general Letitia James. ‘While no amount of money will ever fully repair the damage they caused, this massive influx of funds will bring resources to communities in need so that we can heal.’

Purdue has welcomed the agreement. ‘We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis, and deliver treatment and overdose rescue medicines that will save lives,’ it said. The company is now finalising the details of a new plan of reorganisation to present to the bankruptcy court.