Opioid Crisis: Sackler Family Receives Immunity From Civil Lawsuits In $6 Billion Settlement

The billionaire owners of Purdue Pharma--the Sackler family--will be protected from lawsuits over their company's role in the U.S. opioid crisis in exchange for $6 billion, a New York court of appeals ruled Tuesday.

The three-judge panel of the US Court of Appeals for the Second Circuit ruled the Sackler family would receive full immunity, which it has been seeking for years, from civil suits after its drugs, including OxyContin, were accused of adding to the ongoing opioid epidemic in the country, New York Times reported.

Purdue filed for bankruptcy in 2019 in the aftermath of thousands of lawsuits. The billion-dollar settlement between the Sackler family and eight states, along with the District of Columbia, was initially finalized in March.

"Bankruptcy is inherently a creature of competing interests, compromises, and less-than-perfect outcomes," U.S. Circuit Judge Eunice C. Lee wrote in the court's decision. "Because of these defining characteristics, the total satisfaction of all that is owed--whether in money or in justice--rarely occurs."

As a part of the settlement, Purdue will be rebranded into Knoa Pharma, which will be overseen by a public board, and all its profits will be transferred to funding efforts aimed at treating addiction.

The Sacklers also allowed U.S. organizations to remove the family name from physical buildings, programs and scholarships, as long as the family was not publicly disparaged. In addition, they were mandated to pay $5.5 to $6 billion from the sale of their international drug companies to the states, individual claimants and efforts to overcome the opioid crisis.

Around $750 million from the total payout will go to victims nationwide, who became addicted to OxyContin, and their families.

Purdue Pharma called the ruling a "victory" for the company's creditors, including all state governments and victims who support the Plan of Reorganization.

"Our focus going forward is to deliver billions of dollars of value for victim compensation, opioid crisis abatement, and overdose rescue medicines," Steve Miller, chairman of Purdue's Board of Directors, said in a statement. "Our creditors understand the plan is the best option to help those who need it most, the most fair and expeditious way to resolve the litigation, and the only way to deliver billions of dollars in value specifically to fund opioid crisis abatement efforts."

The statement also confirmed that the Sackler families, who stepped down from Purdue's board of directors in 2018, will have no involvement in the rebranded Knoa Pharma. The Sacklers and Purdue reached a deal in 2021 that paved the way for the family to give up ownership of the pharma company.

However, this protection does not extend to any criminal prosecution against the Sacklers, if any ever filed. It is also worth noting the current ruling only applies to the 2nd Circuit Region of New York, Connecticut and Vermont, according to NPR.

Meanwhile, the families of the late Mortimer and Raymond Sackler, the brothers who founded Purdue Pharma, welcomed and expressed satisfaction with the court's ruling.

"The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need," they said in a statement to CNN. "We are pleased with the Court's decision to allow the agreement to move forward and look forward to it taking effect as soon as possible."

Purdue Pharma first launched the highly addictive painkiller OxyContin in the 1990s, promoting it as a non-addictive. Later, the company was accused of knowingly misleading consumers about the drug's features that fueled the opioid epidemic in the country.

More than 564,000 people died from an opioid overdose between 1999 and 2020, according to the Centers for Disease Control and Prevention.