Purdue Pharma agrees to $7.4B opioid settlement, largest to date

Update: 

• On Jan. 23, a bipartisan coalition of states announced a $7.4 billion settlement in principle with the Sackler family and Purdue Pharma Inc., marking the largest settlement to date with the family accused of fueling the opioid epidemic.
• The settlement ends the Sacklers’ control of Purdue Pharma and their ability to sell opioids in the United States, according to a news release from Texas Attorney General Ken Paxton.
• The states claimed that under the Sacklers’ leadership, Purdue Pharma invented, manufactured and aggressively marketed opioid products for decades, contributing to addiction and overdose deaths nationwide.
• New York, California and 13 other states led the negotiations, following the Supreme Court’s overturning of a previous $6 billion deal. The settlement now awaits approval from additional states, municipalities and bankruptcy and state courts.

Supreme Court Sackler immunity overview: 

• Who: The U.S. Supreme Court heard arguments on whether the Sackler family should be granted immunity as part of Purdue Pharma’s bankruptcy. 
• Why: The Sackler family agreed to pay up to $6 billion to the estate to gain immunity from further opioid litigation liability as part of the bankruptcy.
• Where: The Supreme Court heard the Sackler immunity proceeding in Washington, D.C.

(Dec. 8, 2023)

The U.S. Supreme Court heard arguments on whether the Sackler family that owned Purdue Pharma should gain immunity from further litigation as part of a bankruptcy settlement, Law360 reports.

The Sacklers agreed to pay up to $6 billion to the estate during the bankruptcy in exchange for immunity, the website reports.

However, a bankruptcy watchdog says such immunity might not be appropriate as it might prevent claims against the family even though the family was not the entity that filed the bankruptcy, according to Law360.

Supreme Court Justice Brett Kavanaugh asked why the court would go against long-standing precedent in the Sackler Purdue case in which the victims supported relieving the Sacklers’ liability after the payment by a 97% vote, Law360 reports.

“So in those narrow circumstances, bankruptcy courts for 30 years have been approving plans like this, and I guess I’m trying to figure out, with all that practice under the judiciary’s belt, why we would say it’s categorically inappropriate when the statutory term ‘appropriate’ is one that takes account usually of all the facts and circumstances,” Law360 reports Kavanaugh said during the Supreme Court proceeding. 

Immunity allegedly common in bankruptcy proceeding but requires substantial majority

Immunity along with bankruptcy settlements is common but requires a substantial majority of the creditors to support those releases because they also apply to the creditors who do not give consent, Law360 reports.

Deputy Solicitor General Curtis E. Gannon said he believes the immunity granted to the Sacklers is far beyond what is appropriate and is basically a discharge of debts for the family without the family actually having to file for bankruptcy themselves, according to Law360.

In 2021, a bankruptcy judge said he would approve Purdue Pharma LP’s bankruptcy reorganization plan, which would protect Purdue and the Sackler family owners from current and future opioid class action lawsuits. 

Have you been affected by opioids that came from Purdue Pharma? Let us know in the comments.

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