Purdue Pharma has filed a new bankruptcy plan that details how the funds will be allocated and the proportion paid by its owners, nearly two months after agreeing to a $7.4bn opioid settlement.
The latest scheme will see the company’s owners, the Sackler family, contribute around $6.5bn in instalments over the next 15 years, with $1.5bn to be paid on the day the plan becomes active. An additional $500m could be provided by the Sacklers if international pharmaceutical businesses they sell reach a higher-than-expected value.
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Purdue is expected to raise and contribute $900m while dissolving and transforming into a new public benefit company. The non-profit company that emerges will develop and distribute opioid use disorder and overdose rescue medicines. The Sacklers will have no links to the new company.
The bankruptcy plan is devised to ensure that victims of the opioid crisis receive appropriate compensation and that local governments and states reinvest settlement payments into efforts that address the drug epidemic. Individual victims will receive more than $850m under the plan, subject to certain reserves.
Purdue’s new plan was filed nine months after the original that would have granted the Sacklers immunity from opioid-related lawsuits was blocked by the US Supreme Court. The current settlement does not offer an automatic liability shield to the family. The Sacklers have not filed for bankruptcy themselves and have continually denied any wrongdoing. The new plan, however, will see them contribute $1bn more than under the previous scheme.
The outlay of funds and contribution arrangements from Purdue and the Sacklers relies on full creditor participation. That is, creditors have the choice to opt into the settlement if they wish to be paid. Those who do not wish to benefit from Purdue’s payments have the right to take legal action directly against the Sacklers.
“Following the 2024 Supreme Court ruling, we doubled down on our commitment to work with our creditors to design a new plan that delivers unprecedented value to those affected by the opioid crisis. Today’s filing is a major milestone in that effort,” said Purdue board chairman Steve Miller.
The plan is a major step in finalising the long-running legal saga involving the pain medication Oxycontin (oxycodone) and its role in fuelling the opioid epidemic in the country. Purdue placed the painkiller on the market in 1996, while publicising misleading information and adopting aggressive marketing tactics for the drug.
Purdue, and consequently the Sackler family, have been accused of being the biggest fueller of the crisis, with clear links between the drug’s sales and death statistics. There have been over a million opioid overdose deaths since 1999 in the US, with figures reaching annual highs in 2022 when nearly 82,000 people died. Deaths decreased for the first time in 2023 due to the wider availability of overdose-reversing drug naloxone and legal settlements with other pharma companies have also been suggested to play a role.
National opioid settlements have been reached with other pharma companies such as Teva Pharmaceuticals, and Johnson & Johnson, along with pharmacies CVS, Walgreens, and Walmart.
