Purdue–Sackler Settlement Nears Approval as Most Stakeholders Back Bankruptcy Plan

Purdue–Sackler settlement nears final approval

NEW YORK — Lawyers for OxyContin maker Purdue Pharma, branches of the Sackler family, and a broad coalition of government entities, tribes and individual claimants urged a U.S. bankruptcy judge to approve a plan that would resolve thousands of opioid-related lawsuits nationwide.

If U.S. Bankruptcy Judge Sean Lane accepts the proposal, it could bring closure to a long-running legal battle over Purdue’s role in an opioid crisis tied to roughly 900,000 deaths in the United States since 1999 — a toll that includes fatalities tied to heroin and illicit fentanyl.

Broad support, limited objections

Closing arguments concluded after a three-day hearing on a plan for the company, which filed for Chapter 11 protection six years ago as claims against it ballooned. This round of proceedings has drawn far less opposition than earlier efforts: of more than 54,000 personal-injury claimants who voted on the plan, only 218 rejected it, though many eligible voters did not cast ballots.

The litigation has been emotional and contentious, frequently exposing a tension between demands for accountability and the practical limits of bankruptcy proceedings. The U.S. Supreme Court previously rejected an earlier deal that shielded Sackler family members from litigation; the revised plan narrows that protection by allowing parties who opt out of the settlement to sue individual family members directly.

Key terms of the proposal

Under the proposed deal, certain Sackler family members would contribute up to $7 billion and relinquish ownership of Purdue. The company would be renamed and placed under new oversight, with future profits dedicated to combating the opioid crisis. The plan also includes nonfinancial conditions: some Sacklers would give up roles in companies that sell opioids abroad, family members would be barred from receiving naming rights for institutions in exchange for donations, and a large volume of company documents — including some material that might otherwise be privileged — would be disclosed to the public.

Payments to individuals and governments

Unlike many prior opioid settlements, this agreement sets aside funds specifically for individuals harmed by Purdue’s drugs. About $850 million is allocated for individuals, including over $100 million earmarked for children born with neonatal opioid withdrawal syndrome. Roughly 139,000 people have active claims for those funds, but many claimants lack documentation showing they were prescribed Purdue opioids and therefore may receive nothing.

Lawyers estimate that claimants with documented prescriptions spanning at least six months could receive approximately $16,000 each, while those with shorter documented exposure might receive about $8,000; attorneys’ fees would reduce these amounts. Most settlement money, however, is intended for state and local governments to fund prevention, treatment and recovery programs — and experts say settlement-funded initiatives have likely helped reduce overdose deaths in recent years.

Voices of dissent

A small number of objectors spoke at the hearing, some urging that settlement funds go solely to victims rather than to governments, and others asking the court to hold Sackler family members criminally responsible — a determination Judge Lane said is beyond the bankruptcy court’s authority, although prosecutors remain free to pursue criminal charges.

“The natural laws of karma suggest the Sacklers and Purdue Pharma should pay for what they have done,” Pamela Bartz Halaschak said via video, describing her husband’s struggles after being prescribed OxyContin following an accident.

Critics also argue that individual payouts are too small to address the long-term needs of people with substance use disorder. “Tell me how you guys can sleep at night knowing people are going to get so little money they can’t do anything with it,” said Laureen Ferrante of Staten Island by video.

Context and significance

The wave of lawsuits against Purdue and other industry players began about a decade ago. Major settlements to date total roughly $50 billion, much of which has been directed to combat the opioid epidemic. The Purdue agreement would rank among the largest of those settlements and, if approved, would mark a major milestone in efforts to resolve litigation tied to the crisis.

Judge Lane’s decision will determine whether the proposed settlement ends a long legal chapter and how responsibility and resources will be distributed to address fallout from the opioid epidemic.