States Accept Increased Purdue Pharma Offer of $7.4B to Settle Opioid Suits

Fifty-five states and US territories have agreed to a $7.4 billion settlement from Purdue Pharma and its owners, the Sackler family, who seek to resolve claims involving the drugmaker’s pain medication OxyContin, which is blamed for the nation’s opioid addiction crisis.

According to a statement from New York Attorney General Letitia James, whose office led the settlement talks, the new offer includes approximately $6.5 billion from the Sackler family and about $900 million from Purdue Pharma. Critically, this offer would not shield the Sacklers from additional liability, which was the provision of a prior settlement attempt rejected by the US Supreme Court.

The amount of the earlier settlement was $6 billion.

James proposed the settlement in principle in January. It puts the Sackler family out of the opioid business in the United States, ends their control of Purdue, and creates a structure to deliver funding directly to communities affected by the opioid crisis over the next 15 years.

“I am proud to have helped secure the support of every state and territory in the country for this plan to hold the Sackler family accountable,” James said in the statement. “For decades, the Sacklers put profits over people, and played a leading role in fueling the epidemic of opioid addictions and overdoses. While no amount of money can fully heal the destruction they caused, these funds will save lives and help our communities fight back against the opioid crisis. I will continue to work to deliver justice for all those affected by opioid addiction.”

Purdue has faced legal action for years over the Sacklers’ role in inventing, manufacturing, and aggressively marketing OxyContin. Starting in the late 1990s, a generation of Americans became addicted to prescription opioids, which the National Institutes of Health reports caused 3442 deaths in 1999 and rose to a peak of 17,029 in 2017. However, efforts to crack down on prescription opioids led to rising heroin use, as those who fell victim to the powerful pills following surgery or an injury sought another means to feed their addiction.

Later, synthetic opioid fentanyl largely replaced heroin and accounted for 73,838 deaths in 2022, by far the largest source of the nation’s 107,941 drug overdose deaths that year. Since the epidemic began, the CDC estimates that more than 850,00 Americans have died from drug overdoses, with deaths finally starting to decline.

If approved, this latest settlement offer will provide funds to participating states, local governments, affected individuals, and other parties that have previously sued the Sacklers or Purdue. Under the agreement, Purdue’s $900 million and the family’s first installment of $1.5 billion would be paid in early 2026.

According to news reports, payouts would start after the drugmaker wins creditor support for its Chapter 11 plan.

The agreement does not include Oklahoma, which reached a prior settlement of $270 million in 2019.

The settlement would be on top of earlier agreements with drug distributors as well as a $650 million settlement with McKinsey and Company for its role in helping Purdue Pharma boost sales.

In a statement reported by ABC News, Purdue Pharma said, "We are extremely pleased that a new agreement has been reached that will deliver billions of dollars to compensate victims, abate the opioid crisis, and deliver treatment and overdose rescue medicines that will save lives. We have worked intensely with our creditors for months in mediation, and we are now focused on finalizing the details of a new Plan of Reorganization, which we look forward to presenting to the bankruptcy court."