Purdue Pharma Submits New $7.4 Billion Bankruptcy Plan for Opioid Settlement

Purdue Pharma has filed a new bankruptcy plan, marking a major step toward resolving thousands of opioid-related lawsuits with a $7.4 billion settlement.

The plan, submitted on Tuesday in White Plains, New York, follows a U.S. Supreme Court ruling that blocked Purdue’s previous bankruptcy proposal, which would have shielded its owners—the Sackler family—from further opioid-related lawsuits.

The latest bankruptcy proposal outlines how settlement funds will be distributed among states, local governments, and individuals affected by the opioid epidemic.

Purdue anticipates widespread creditor support and plans to start soliciting votes and opt-in decisions in May 2025. Once the process is completed, the plan will go before a U.S. bankruptcy judge for final approval.

The settlement aims to address the devastating impact of OxyContin, Purdue Pharma’s powerful pain medication, which has been linked to the opioid addiction crisis in the United States.

The lawsuits claim that Purdue’s marketing strategies downplayed the risks of addiction, contributing to widespread opioid abuse and overdose deaths.

Purdue Chair Steve Miller emphasized that the company has worked through months of intense negotiations to finalise a deal to deliver much-needed financial relief to affected communities.

“We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good,” Miller stated.

The previous settlement plan, which was struck down by the U.S. Supreme Court, sought to grant the Sackler family broad immunity from future opioid lawsuits.

However, the Court ruled that such protections exceeded the bankruptcy court’s authority, as the Sacklers never filed for bankruptcy. The revised settlement offers creditors the choice to opt in—those who agree will receive payments, while others can continue pursuing legal action against the Sacklers in court.

The Sackler family has increased their financial contribution to the settlement, committing between $6.5 billion and $7 billion—an increase of $1 billion compared to the rejected deal.

Additionally, Purdue Pharma will contribute $900 million of its own funds and make non-monetary concessions, including transforming into a public benefit company focused on producing medications to treat opioid addiction and reverse overdoses.

The plan also ensures that settlement funds will be used by states and local governments to combat the opioid epidemic.

The plan designates $850 million for individual victims, including people who were prescribed OxyContin and later became addicted, as well as infants born with neonatal withdrawal syndrome due to opioid exposure in the womb.

Purdue Pharma’s bankruptcy settlement still requires final court approval, with key creditor votes expected in May. A successful agreement could provide billions in funding for opioid addiction treatment and recovery programs across the U.S.
Source: CNN
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