Purdue Pharma to Dissolve as Part of Massive Settlement

OxyContin maker Purdue Pharma is set to be dissolved and replaced by a company focused on the public good by the week's end, as a massive legal settlement resolving thousands of lawsuits takes effect, the AP reports. A federal judge on Tuesday delivered a criminal sentence to the company to resolve a US Department of Justice probe—a last necessary step to clear the way for the settlement. US District Judge Madeline Cox Arleo made her decision after listening to hours of impact statements from people who lost loved ones or struggled with addiction themselves and requested she reject the negotiated sentence. While she didn't go that far, she said she sympathized with people who bore the brunt of an epidemic linked to more than 900,000 deaths in the US since 1999.

The guilty plea and civil settlement with the federal government included $8.3 billion in forfeitures, fines, and penalties. But the federal government agreed in a negotiated settlement to collect just $225 million in exchange for Purdue reaching a separate settlement of the thousands of lawsuits it faced from state, local and Native American tribal governments, along with other groups. Purdue's guilty plea did not include restitution to victims. After years of legal twists and turns—and $1 billion and counting in legal and professional fees for the parties—the broader sentence was approved by a bankruptcy judge in November.

The settlement, which Purdue says could take effect as soon as Friday, calls for members of the Sackler family who own the company to contribute up to $7 billion over 15 years. Most of the money is to go to government entities to use to fight the opioid crisis. A Purdue lawyer said most of the lawsuits against the company over opioids did not include specific financial claims. But the ones in those that did totaled over $40 trillion in damages. Payments to individual victims are expected to range from about $8,000 to about $16,000. Some people said Tuesday that they could be rejected for payments because they can't locate decades-old prescriptions to the pills. Arleo told Purdue bankruptcy lawyers to ensure there are additional ways to prove they were harmed. Overall, the settlements are worth more than $50 billion, and most of the money is to be used to address the overdose epidemic.

Under the Purdue deal, members of the Sackler family will be shielded from lawsuits over opioids from those who agree to the payments. Family members received payments from the company totaling about $10.7 billion from 2008 through 2018, but said nearly half that amount was used to pay taxes on behalf of the business. As part of the settlement, Purdue itself will cease to exist and be replaced by a new company, Knoa Pharma, with a board appointed by the states and an aim of combating the opioid crisis. Millions of internal Purdue documents are to be made public. Members of the Sackler family also have agreed not to object if their names are taken off museums and other institutions they've supported.