Bankrupt Purdue Pharma LP and its owners have agreed to pay $7.4 billion to a group of U.S. states and other parties to settle long-running litigation over OxyContin’s role in the deadly opioid epidemic.

The deal comes after the U.S. Supreme Court last year rejected a $6 billion pact that would have protected Purdue’s owners, members of the billionaire Sackler family, from any further litigation related to the addiction crisis. Thursday’s settlement in principle doesn’t give the family automatic protection from future litigation, New York Attorney General Letitia James said in a statement.

The accord is the latest twist in a legal saga that has been bitterly fought by the Sacklers and a bipartisan group of state attorneys general, who say the addiction epidemic that has killed hundreds of thousands of Americans was exacerbated by the marketing and sales of Purdue’s OxyContin painkiller.

James said the accord “is built on consensual releases” from further litigation in exchange for the Sackers’ payments. That means those that don’t join the pact can still sue. In its decision in June, the Supreme Court rejected the earlier pact because it forcibly ended lawsuits by plaintiffs who didn’t join the settlement.

‘Relentlessly pursued profit’

“The Sackler family relentlessly pursued profit at the expense of vulnerable patients, and played a critical role in starting and fueling the opioid epidemic,” James said in the statement. “While no amount of money will ever fully repair the damage they caused, this massive influx of funds will bring resources to communities in need so that we can heal.”

Under the deal, the Sackler family members will eventually pay a total of $6.5 billion while Purdue will pay $900 million.

The company said in a statement that it was “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.” It said it was finalizing a new reorganization plan to present to the bankruptcy court.

Representatives of the families of the late Mortimer Sackler and Raymond Sackler have long denied wrongdoing and said they would support “a resolution that provides substantial resources to help combat a complex public health crisis.”

15 states

The new settlement resolves claims by 15 states across the political spectrum: New York, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia and West Virginia.

“I have said since day one that this fight has been about justice and accountability for the hundreds of thousands of victims and families wrecked by the opioid epidemic,” said William Tong, the attorney general of Connecticut, where Purdue is based. “There will never be enough justice or dollars to restore those families or right this terrible wrong.”

The deal resolves not only state claims but also thousands of potential individual lawsuits that could have gone forward against the Sacklers one at a time — although it allows for claims by parties that don’t sign on to the settlement.

The bankruptcy court judge in the Purdue case must approve the deal, which would deliver funds to communities across the U.S. over 15 years. Under the accord, Purdue will continue to be overseen by a monitor and will be barred from lobbying or marketing opioids. A board of trustees chosen by the states, working with the other creditors, “will determine the future of the company,” James said.

Purdue’s guilty plea

Purdue filed for bankruptcy protection from creditors in 2019. The next year, Sackler family members agreed to pay the U.S. Justice Department $225 million to settle civil claims while Purdue pleaded guilty to three federal felonies related to its marketing of OxyContin.

Purdue worked to exit bankruptcy court with input from government authorities across the U.S. and lawyers representing thousands of opioid victims and their families, culminating in the earlier, $6 billion settlement. That deal won overwhelming support from both sides, but a vocal contingent remained adamantly opposed to shielding the Sacklers from future lawsuits.

Lawyers representing Purdue, opioid victims and other proponents of that pact had claimed those harmed by the addiction crisis could get nothing from the Sacklers if the Supreme Court rejected the deal. But the parties went back to the negotiating table when the justices overturned the accord.

The bankruptcy case is Purdue Pharma LP, number 19-23649, in the U.S. Bankruptcy Court for the Southern District of New York.

(With assistance from Jef Feeley and Jonathan Randles.)

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