Purdue Pharma, the maker of OxyContin, is set to dissolve as part of an $8.3 billion settlement resolving thousands of lawsuits related to the opioid crisis. A federal judge approved a criminal sentence for Purdue Pharma on Tuesday, sentencing the company to pay over $5 billion in criminal penalties.
Key Takeaways
Purdue Pharma will dissolve as part of an $8.3 billion settlement resolving thousands of opioid-related lawsuits. A federal judge sentenced the company to pay over $5 billion in criminal penalties, clearing the way for its bankruptcy agreement.
- Purdue Pharma to be replaced by Knoa Pharma, focused on public good
- Settlement includes $7 billion from Sackler family over 15 years
- Judge approves settlement despite victim impact statements requesting rejection
- Company admitted to deceiving regulators and paying kickbacks to boost opioid sales
The settlement includes a $7 billion contribution from the Sackler family over 15 years, with most of the money going to government entities to fight the opioid crisis. Payments to individual victims are expected to range from about $8,000 to about $16,000. The judge heard impact statements from people who lost loved ones or struggled with addiction themselves and requested she reject the negotiated sentence.
Judge Madeline Cox Arleo sympathized with the victims but ultimately approved the settlement, stating that it was a purposeful, intentional, and sophisticated crime scheme. Under the deal, members of the Sackler family will be shielded from lawsuits over opioids from those who agree to the payments.
The sentence handed down by a federal court in Newark, N.J., comes after Purdue pleaded guilty in October 2020 to charges over its role in the opioid crisis. Prosecutors said the Sackler family-owned company worsened the crisis that has killed hundreds of thousands across the United States by aggressively marketing its addictive drugs while downplaying the risks of overdose and addiction.
Purdue Pharma admitted to deceiving regulators and paying kickbacks to doctors to boost opioid sales. The penalties announced include a $3.544 billion criminal fine and an additional $2 billion in criminal forfeiture, though the Justice Department said it will credit up to $1.775 billion against the forfeiture amount based on the value conferred to state, local, and tribal governments through its bankruptcy.
The settlement is among the largest in a series of settlements by drugmakers, wholesalers, and pharmacies in recent years. With Tuesday's sentence, Purdue can be dissolved and replaced by the public benefit company Knoa Pharma, which will receive the assets and expertise of the old company to produce addiction treatments and overdose-reversal medications.
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