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The Sackler family and the opioid maker they founded, Purdue Pharma, have together agreed to pay $7.4bn to settle liabilities over their roles in the opioid crisis, ending months of negotiations after a previous deal fell apart.
The latest agreement, which still needs bankruptcy court approval, is $1.4bn greater than the previous deal struck between the parties. The new settlement was agreed with more than a dozen US states and other individuals who had filed lawsuits against the company. As part of the agreement, the Sackler family will pay $6.5bn over the next 15 years, while Purdue will pay $900mn.
Yet while attorneys-general across the country touted the headline multibillion-dollar figure of the deal’s potential disbursements, the full details of how the payouts will be structured are unknown. Among those details are whether opioid victims may continue to sue the Sackler family members going forward, and to what extent the family will be shielded from such litigation — two sticking points from the previous agreement.
A 50-page term sheet with the full picture could be released as soon as next week, said a person familiar with the mediation process. Without that document, questions also remain about how much of the $7.4bn will be dispersed to victims and recovery programmes.
Until recently, one member of the Sackler family had not signed on to the settlement. But in a court filing on Monday, mediator Shelley Chapman wrote the member had finally been brought onside, laying the groundwork for “various other significant aspects of the mediation to progress”.
The drugmaker initially filed for bankruptcy in 2019 in a New York federal court to manage the lawsuits over its role in the opioid crisis.
“Families throughout New York and across the nation are suffering from the immense pain and loss wrought by the opioid crisis,” New York attorney-general Letitia James, one of the officials who helped broker the deal, said on Thursday. “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.”
In 2020, Purdue reached an $8bn settlement with the Department of Justice in which the company plead guilty to three federal felony charges. As part of the settlement, the company admitted marketing OxyContin to healthcare workers suspected of diverting opioids, giving doctors kickbacks to write more prescriptions and coaxing them to write prescriptions for illegitimate reasons.
The latest Purdue settlement is one of the biggest potential payouts to emerge from the US opioid crisis, which has led to more than 600,000 deaths since 1999, according to the Centers for Disease Control and Prevention. Roughly 140,000 personal injury victims could benefit from the deal, according to court filings.
The US Supreme Court last summer struck down a previous $6bn deal agreed between the Sackler family and creditors, which was largely negotiated during the pandemic. The agreement relied on shielding family members from future lawsuits, which the high court said was impermissible without the family members filing for bankruptcy themselves.
“What the Sacklers want — what anybody 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. “A lot of Sacklers benefited from this. There were kids who were born after Purdue filed for bankruptcy who are probably still benefiting from the largesse.”
The new deal is structured so that the Sacklers are not given automatic protection from liabilities, but victims will need to agree to not pursue further legal action in order to receive a payout, according to the New York attorney-general office.
The Supreme Court decision had left lawyers and companies trying to decide how to resolve so-called “mass torts”, where corporate product liability claims totalled in the thousands of victims and hundreds of millions or even billions of dollars.
The funds committed by the Sacklers and Purdue will be used over the next 15 years to fund opioid addiction treatment and recovery programmes, Texas’s attorney-general’s office said. Critically for many victims, members of the Sackler family will no longer be allowed to sell opioids in the US as part of the deal, and their ownership of Purdue has ended.
The Sackler family did not respond to a request for comment.
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