Drugmaker Purdue Pharma filed a new bankruptcy plan on March 18, a major step toward finalizing a proposed opioid settlement of $7.4 billion.
The maker of the powerful semi-synthetic opioid oxycodone—also marketed as OxyContin and by other names—filed a Chapter 11 reorganization plan and related disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York.
The Sackler family, which previously owned Purdue Pharma, would “have no ownership interest or role with the new company,” according to the statement, which noted that family members have had no involvement in Purdue since the end of 2018.
The new company would have a core mission to abate the opioid crisis and improve public health, including by developing and distributing lifesaving opioid use disorder and overdose rescue medicines for no profit, the statement said.
It would also be run by a board appointed by state governments, the statement added.
Assuming full creditor participation, the plan would see the Sacklers pay out approximately $6.5 billion in installments over the next 15 years—subject to certain reserves—to states, local governments, and individuals harmed by the crisis.
They would pay $1.5 billion on the day the reorganization plan becomes effective, and Purdue would contribute 100 percent of its assets, “with an expected $900 million in cash available for distribution on the day of emergence,” according to the statement.
Purdue said it expects widespread creditor support for the deal.
According to the statement, the latest plan “is the only opioid settlement to date that meaningfully compensates individual victims,” and, assuming full participation, “individual victims will receive more than $850 million, subject to certain reserves.”
Purdue Says Deal Is ‘Major Milestone’
“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,” Purdue Board Chairman Steve Miller said in the statement. “I sincerely thank our stakeholders for their dedication and collaboration, and I look forward to having the plan confirmed and consummated as quickly as possible.”The deal was the nation’s largest settlement to date with individuals allegedly responsible for contributing to the opioid crisis.
In a statement announcing the agreement, New York Attorney General Letitia James said Purdue, under the Sacklers’ leadership, “invented, manufactured, and aggressively marketed opioid products for decades, fueling waves of addiction and overdose deaths across the country.”
The money from the deal would be used across the country over the next 15 years to support opioid addiction treatment, prevention, and recovery programs, James said.
The Sacklers contributed money to Purdue’s bankruptcy settlement but did not file for bankruptcy themselves.
Purdue’s new bankruptcy plan responds to that ruling by allowing creditors to opt into the settlement if they wish to be paid. Those who choose not to join the settlement are free to pursue lawsuits against the Sacklers, who have denied any wrongdoing.
“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,” Miller said. “Today’s filing is a major milestone in that effort.”
