(WNY News Now) Attorney General Letitia James of New York and a group of other states have taken the battle to Big Pharma, settling with Purdue Pharma and the Sackler Family for their role in causing the nation’s opioid crisis for $7.4 billion.
NEW YORK The Office of the Attorney General (OAG) has reached a $7.4 billion settlement in principle with members of the Sackler family and their company Purdue Pharma, Inc. (Purdue) for their crucial role in causing the opioid crisis, according to a statement made today by New York Attorney General Letitia James. For decades, Purdue, led by the Sacklers, developed, produced, and aggressively promoted opioid medications, which fueled epidemics of addiction and overdose fatalities nationwide. Over the next 15 years, the settlement will provide funds directly to communities nationwide to promote opioid addiction treatment, prevention, and recovery initiatives, ending the Sacklers’ influence over Purdue and their capacity to distribute opioids in the US. Following the U.S. Supreme Court’s June 2024 decision to reverse a previous multistate deal with the Sacklers and Purdue, the $7.4 billion settlement in principle is the country’s largest payout to date with those accountable for contributing to the opioid crisis.
Attorney General James stated that the opioid problem is causing great sorrow and loss for families in New York and across the country. The Sackler family was instrumental in initiating and escalating the opioid epidemic and ruthlessly sought financial gain at the expense of susceptible victims. Even while there will never be enough money to completely undo the harm they created, this enormous infusion of capital will provide resources to underserved communities, allowing us to recover. Purdue is no longer under the Sacklers’ control, and they will never be permitted to sell opioids in the US again. I’ll keep pursuing the businesses responsible for the opioid crisis and working to bring justice to individuals who have been harmed.
The participating states, local governments, impacted people, and other parties who have previously sued Purdue or the Sacklers will get money from the settlement if it is authorized. With $1.5 billion paid out in the first payment, $500 million after a year, another $500 million after two years, and $400 million after three years, a sizable portion of the settlement cash will be disbursed in the first three years. The settlement will provide up to $250 million for opioid treatment and recovery initiatives across the state of New York.
The settlement marks the end of the Sacklers’ ownership of Purdue and prohibits them from selling opioids in the US, in addition to providing $7.4 billion to combat the opioid issue. The company’s destiny will be decided by a board of trustees chosen by participating states after consulting with the other creditors. As part of the settlement, Purdue will remain under monitor supervision and will not be allowed to sell or push for opioids.
Attorney General James launched the largest case in the country in March 2019 to hold the different distributors and manufacturers liable for the opioid problem. Purdue Pharma, its affiliates, members of the Sackler Family, and trusts they manage were among the manufacturers listed in the case. A multistate settlement that would have required Purdue and the Sackler family to pay nearly $5.5 billion was approved by the U.S. Bankruptcy Court for the Southern District of New York in 2021. The United States Supreme Court ruled in June 2024 that the Sacklers were not entitled to a complete or automatic protection from accountability, invalidating the prior bankruptcy settlement. In theory, the present deal is based on voluntary releases in return for the payments the Sacklers will be making, rather than providing them with any such automatic protection.
In theory, the settlement includes the estates of Jonathan and Beverly Sackler as well as the eight heirs of Purdue founders Raymond and Mortimer Sackler who were members of the Board of Purdue: Richard, Kathe, Mortimer Jr., Ilene, David, and Theresa Sackler. They also include their counselors, connected trusts, and the majority of their heirs and children.
The attorneys general of California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and West Virginia have joined Attorney General James in securing the settlement in principle.
Attorney General James has obtained more than $3 billion for New York state from opioid makers and distributors for their involvement in the opioid epidemic, including an additional $250 million from this settlement. These consist of Amerisource Bergen, Johnson & Johnson, Mallinckrodt, Allergan, Endo, McKesson, Cardinal Health, Indicor, Amneal Pharmaceuticals, Hikma Pharmaceuticals, and Teva Pharmaceuticals. Additionally, Attorney General James has spearheaded multistate coalitions to win billion-dollar settlements with Walmart, Walgreens, and CVS for their roles in improperly regulating prescriptions for opioids. Attorney General James also led a bipartisan group of states in reaching settlements with the marketing firm Publicis Health and the consulting firm McKinsey & Company for their roles in escalating the opioid problem.
First Deputy Attorney General Jennifer Levy handled this case for New York with the help of Special Counsel David Nachman, Senior Advisor & Special Counsel M. Umair Khan, Special Counsel Andrew Amer, Assistant Attorney General & Special Assistant to the First Deputy Gina Bull, Special Counsel for Complex Litigation Colleen Faherty, all of the Executive Division, as well as Gary Fishman, the Senior Advisor to the Criminal Division, former Special Counsel Eric Haren, Martin Mooney, the Chief of the Civil Recoveries Section, Assistant Attorney General Noah Popp of the Consumer Frauds Bureau, Assistant Attorney General Robert Rock of Civil Recoveries, Assistant Attorney General Jennifer Simcovitch and Eve Wooden of the Health Care Bureau, Victoria Khan, the Director of Research and Analytics, Data Scientists Ken Morales and Blake Rubey, Paige Podolny, Kristin Petrella, Hewson Chen, and Darlene Eng of the Practice Technologies Group, and Legal Support Analyst Labiba Hasan.