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15 States Sign on to Proposed $4.5B Opioid Settlement With Purdue Pharma, Sackler Family

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What You Need to Know

  • If the settlement plan is approved, Purdue and the Sacklers will pay $4.5 billion over nine years for prevention, treatment and recovery programs related to opioid addiction across the United States.
  • Nine other states and the District of Columbia have yet to agree to the new deal.
  • New York State Attorney General Letitia James said this primarily a civil mediation and the agreement is silent on criminal action.

After a marathon mediation session, New York and 14 other states have agreed to a proposed settlement with Purdue Pharma and the Sackler family, according to documents filed late Wednesday in the U.S. Bankruptcy Court for the Southern District of New York.

If the settlement plan is approved by U.S. Bankruptcy Judge Robert Drain, Purdue and the Sacklers will pay $4.5 billion over nine years for prevention, treatment and recovery programs related to opioid addiction across the United States. New York is expected to receive at least $200 million from the settlement.

The agreement also lays out a plan for Purdue to release tens of millions of documents, including 13 categories of attorney-client privileged records, to the public.

New York State Attorney General Letitia James said there could be “no perfect solution” after the tragedies of the opioid crisis, but she said the deal would end “delays and legal maneuvering that could possibly continue for years and across multiple continents.”

“For nearly two years, since Purdue Pharma declared bankruptcy, the company and the Sackler family have used every delay tactic possible and misused the courts—all in an effort to shield their misconduct,” James said. “While this deal is not perfect, we are delivering $4.5 billion into communities ravaged by opioids on an accelerated timetable and it gets one of the nation’s most harmful drug dealers out of the opioid business, once and for all.”

Nine other states and the District of Columbia have yet to agree to the new deal, according to the filing. The agreement was reached after extensive negotiations by phone and in person, according to the filing, including a session lasting from 8:30 a.m. to midnight on July 1.

In a statement, Purdue said it will continue to build consensus for its reorganization plan.

“The progress made in the third and final round of mediation builds upon the support already publicly expressed by nearly every organized creditor group in the bankruptcy proceedings,” the statement said. “We will continue to work to build even greater consensus for our Plan of Reorganization, which would transfer billions of dollars of value into trusts for the benefit of the American people and direct critically-needed medicines and resources to communities and individuals nationwide who have been affected by the opioid crisis.”

During a news conference Thursday morning, James emphasized that Purdue and the Sacklers “took advantage” of bankruptcy law to avoid further accountability for their actions, including New York state’s massive opioid lawsuit, which named Purdue as a defendant when it was filed in 2017.

The opioid trial is currently proceeding at the Touro Law Center on Long Island, without some of the most notable original defendants.

Attorneys for both sides have nonetheless mentioned Purdue and its flagship opioid product, OxyContin, several times through the first days of the trial, highlighting its role as the first major drug in the opioid crisis of the late 1990s and early 2000s.

James did not directly answer a question at the news conference about whether the Sacklers or Purdue could face criminal charges.

“This is primarily a civil mediation and the agreement is silent on criminal action,” she said.

Drain is set to decide whether to approve the plan after a hearing scheduled for August 9 in the federal courthouse in White Plains, New York.

The judge in May approved a deal in which Skadden Arps Slate Meagher & Flom, WilmerHale and Dechert together reduced their fee applications for legal services to Purdue by $1 million after they failed to disclose common interest agreements involving members of the Sackler family.