Purdue Pharma, maker of the highly addictive painkiller OxyContin, have offered to pay up to $6 billion to victims of the US opioid crisis to settle an avalanche of litigation, according to a report by a federal mediator
Purdue Pharma is the maker of the highly addictive painkiller OxyContin. GETTY IMAGES NORTH AMERICA via AFP / Drew Angerer

The U.S. Supreme Court on Thursday overturned a landmark settlement involving Purdue Pharma, marking a significant setback for efforts to resolve claims related to the opioid crisis. According to NBC News, the ruling dealt a blow to Purdue Pharma's bankruptcy reorganization plan, which aimed to allocate billions of dollars to victims of opioid addiction while shielding the Sackler family from future lawsuits.

The justices, voting 5-4, determined that the bankruptcy court had exceeded its authority by granting legal immunity to the Sacklers, who owned Purdue Pharma. This decision jeopardizes billions of dollars earmarked for compensating victims of the opioid epidemic.

CNN reported that the Supreme Court's decision invalidated a controversial provision that would have absolved the Sackler family from liability in exchange for their contribution of $6 billion to settle claims against Purdue Pharma. Justice Neil Gorsuch, writing for the majority, criticized the expansive legal protections sought by the Sacklers, stating that such releases were not authorized under current bankruptcy law. The dissenting opinion, led by Justice Brett Kavanaugh, expressed concern that the ruling would delay justice for thousands of victims who had fought for compensation after years of litigation.

Financial Times highlighted the far-reaching implications of the Supreme Court's decision, emphasizing its impact on Purdue Pharma's bankruptcy proceedings. The ruling has thrown into disarray a settlement that had garnered broad support among creditors, including states and municipalities affected by the opioid crisis. Purdue Pharma and the Sackler family now face renewed negotiations with creditors, potentially leading to protracted legal battles if a new settlement cannot be reached swiftly.

Despite the setback, Purdue Pharma expressed determination to continue pursuing a resolution that addresses both victim compensation and opioid crisis abatement efforts, emphasizing its commitment to emerge from bankruptcy as a responsible corporate entity.