A federal bankruptcy court judge has approved OxyContin-maker Purdue Pharma’s latest deal to settle thousands of lawsuits related to the opioid crisis, an agreement that mandates its owners, the Sackler family, contribute billions of dollars and relinquish ownership of the company. U.S. Bankruptcy Judge Sean H. Lane, presiding over the US Bankruptcy Court for the Southern District of New York, announced on Friday that he would sign off on the Chapter 11 plan, with a detailed ruling to follow in a hearing next week.

This landmark deal, contemplating an estimated $7.4 billion in payments from the Sackler family, aims to address the widespread harm caused by the mass marketing and production of addictive painkillers. The agreement specifically requires the Sacklers to contribute approximately $6.5 billion in settlement installments over 15 years, subject to certain reserves. Notably, this revised plan replaces a previous agreement that the U.S. Supreme Court rejected last year, which had improperly granted blanket legal immunity to the Sackler family from future lawsuits. Under the new arrangement, entities not opting into the settlement retain the right to sue the family members, although much of the family’s assets are reportedly held in offshore trusts, making legal access challenging.

The legal odyssey surrounding Purdue Pharma has been described by those involved as one of the most complicated bankruptcies in U.S. history. Purdue filed for bankruptcy protection in 2019, facing more than 2,600 opioid addiction lawsuits and creditor claims that escalated to trillions of dollars. In 2020, the company pleaded guilty to federal conspiracy and fraud charges concerning its business practices. The opioid crisis itself has been linked to an estimated 900,000 deaths in the U.S. since 1999, encompassing fatalities from heroin and illicit fentanyl.

The bankruptcy plan garnered near-unanimous support from various legal groups, including attorneys representing states, cities, counties, Native American tribes, and individuals with addiction-related claims. Over 99% of voting creditors backed the updated settlement plan. Purdue lawyer Marshall Huebner emphasized that while no amount of money could fully compensate for the suffering, the plan is “entirely lawful, does the greatest good for the greatest number in the shortest available timeframe.” He also clarified that the proceedings do not offer immunity or buy justice for any party, and the settlement does not preclude prosecutors from pursuing criminal liability against Sackler family members, an issue beyond the bankruptcy court's scope.

A significant aspect of the deal is the allocation of funds. While the majority of the settlement money will go to state and local governments for opioid abatement efforts, approximately $850 million is specifically earmarked for individuals and families harmed by Purdue’s products. Of this, over $100 million is carved out to assist children born dealing with opioid withdrawal. Individual victims with active claims, numbering around 139,000, are expected to receive payments next year. Lawyers anticipate that those with prescriptions for Purdue’s opioids for at least six months could receive about $16,000 each, while those with shorter prescriptions might receive around $8,000, prior to legal fees. Individuals have until March 1 to agree not to sue the Sacklers and apply for these funds. Government entities, however, will receive their full allocations over a period of up to 15 years.

Beyond financial compensation, the settlement includes several non-financial provisions. Purdue Pharma itself will undergo a significant transformation: it will change its name to Knoa Pharma and transfer its business assets to a public benefit company. This new entity will be overseen by new administrators dedicated to combating the opioid crisis, with future profits directed towards developing and distributing opioid overdose reversal and addiction treatment medications. This transition is projected to occur by the spring of 2026. Furthermore, certain members of the Sackler family are required to cease involvement in companies that sell opioids internationally, and they are barred from having their names associated with institutions in exchange for charitable contributions – a practice already leading to the removal of the Sackler name from numerous museums and universities. Crucially, company documents, including many typically protected by lawyer-client privilege, are slated to be made public.

Despite the broad consensus, a small number of individual objectors voiced their concerns during the hearings. Some argued that only victims, rather than government entities, should receive the funds, while others desired criminal accountability for the Sackler family. Pamela Bartz Halaschak, whose husband struggled with addiction after being prescribed OxyContin, stated via video that the deal “isn’t enough,” suggesting that “the natural laws of karma suggest the Sacklers and Purdue Pharma should pay for what they have done.” Laureen Ferrante of Staten Island questioned the inadequacy of individual compensation, remarking, “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.” However, Christopher Shore, a lawyer representing a group of individual victims, pragmatically noted that the settlement offers a better outcome than prolonged litigation against the Sackler family, acknowledging that “sometimes bad people win in litigation.”

This Purdue deal is among the largest in a series of opioid settlements that have collectively amounted to approximately $50 billion from drugmakers, wholesalers, and pharmacies. Most of this money has been channeled into efforts to combat the opioid crisis, which has seen overdose death numbers decline in recent years, partly attributed to the impact of these settlement dollars. The approval of this plan marks a significant step towards closing a long and contentious chapter in the legal battle to hold the company accountable for its role in a national public health catastrophe.