OxyContin Maker to Be Replaced by New Company Focused on Combating Opioid Crisis
Purdue Pharma, the manufacturer of OxyContin, is scheduled to be dissolved and succeeded by a new entity dedicated to public health by the end of the week, as a comprehensive legal settlement addressing thousands of lawsuits takes effect.
On Tuesday, a federal judge issued a criminal sentence to Purdue Pharma to resolve an investigation by the US Department of Justice, marking the final necessary step to enable the settlement.
Victims of the opioid epidemic, which has been associated with over 900,000 deaths in the United States since 1999, provided impact statements during the proceedings. Many affected individuals urged the judge to reject the proposed sentence, contending it fails to deliver genuine justice.
Sentence Involves Financial Penalties Without Individual Accountability
In 2020, Purdue reached an agreement with the Department of Justice to settle both criminal and civil investigations against the company.
The Stamford, Connecticut-based firm admitted it lacked an effective program to prevent its potent prescription opioids from being diverted to the illicit market, despite representations to the US Drug Enforcement Administration to the contrary.
Additionally, Purdue acknowledged it compensated physicians through a speakers program to encourage opioid prescriptions and paid an electronic medical records company to provide doctors with patient information that promoted increased opioid prescribing.
Only Purdue Pharma as a corporate entity was charged; no individuals faced criminal charges.
The company's guilty plea and civil settlement with the federal government entailed $8.3 billion in forfeitures, fines, and penalties. However, the federal government agreed to collect only $225 million under a negotiated arrangement contingent on Purdue settling thousands of lawsuits filed by state, local, and Native American tribal governments, among other parties. The plea agreement did not include restitution payments to victims.
Following years of complex legal proceedings and over $1 billion in legal and professional fees incurred by involved parties, a bankruptcy judge approved the broader settlement in November.
Voices of Those Impacted: Calls for True Justice
US District Judge Madeline Cox Arleo heard testimony on Tuesday from individuals affected by opioids in various ways, including mothers who lost sons to overdoses, a teenager born experiencing withdrawal whose mother later died, and patients prescribed OxyContin who endured years of addiction treatment and associated hardships.
Many speakers implored Judge Arleo, who at times appeared emotionally moved, to reject the negotiated sentence.
“We still deserve justice,” said Alexis Pluis, a mother from upstate New York who lost her son to opioids in 2014 and expressed doubt about receiving any settlement funds due to difficulty locating 23-year-old medical records confirming her son’s OxyContin prescription.
More than 54,000 individuals with personal injury claims voted in favor of the settlement, while approximately 200 opposed it.
“Justice to me looks like more than just money,” stated Michele Wagner, whose son died of an overdose, expressing a desire to see criminal charges brought against members of the Sackler family, Purdue’s owners.
Conversely, Kara Trainor, who is recovering from an addiction that began with an OxyContin prescription in 2002 and participated in settlement discussions, supports approval of the sentence, believing it offers a path toward closure.
“For me to be the best version of myself in my own recovery, I had to start healing and gravitate away from the anger I felt,” Trainor said. “The anger itself was poisonous to me. It was destroying my mental health.”
Sackler Family to Contribute Up to $7 Billion Over 15 Years
The settlement, which Purdue anticipates could become effective as soon as Friday, requires members of the Sackler family, owners of the company, to pay up to $7 billion over a 15-year period. The majority of these funds are designated for government entities to support efforts addressing the opioid crisis.
During Tuesday’s hearing, Judge Arleo questioned why the Sacklers were permitted to spread payments over 15 years. Lawyers explained this arrangement was necessary because the family needed to liquidate other business interests to generate the funds.
The judge suggested an alternative perspective, stating,
“They’d rather pay it from future money than pay it now.”
A Purdue attorney noted that most opioid-related lawsuits against the company did not specify financial damages, but those that did amounted to over $40 trillion in claims.
This settlement ranks among the largest in a series involving pharmaceutical manufacturers, wholesalers, and pharmacies in recent years and is unique in including payments to some individual victims or their survivors.
Payments to individual claimants are expected to range between approximately $8,000 and $16,000.
Collectively, these settlements exceed $50 billion, with the majority allocated to combat the overdose epidemic.
Under the terms of the Purdue agreement, Sackler family members will receive legal protection from future opioid-related lawsuits from those who accept the settlement payments. The family reportedly received approximately $10.7 billion from Purdue between 2008 and 2018, though they claim nearly half of this amount was paid in taxes on behalf of the business.
As part of the settlement, Purdue Pharma will cease operations and be replaced by a new company, Knoa Pharma, governed by a board appointed by the states and dedicated to addressing the opioid crisis. Additionally, millions of internal Purdue documents will be made publicly accessible.
Members of the Sackler family have also agreed not to oppose the removal of their names from museums and other institutions they have historically supported.
