Purdue Pharma Says It Will Transform Into 'Public Benefit Company,' As It Files For Bankruptcy — Proposes $7.4 Billion Settlement In Opioid Case

Amid the ongoing opioid crisis, Purdue Pharma has proposed a new bankruptcy plan. The pharmaceutical giant is offering a settlement of at least $7.4 billion to address its role in the crisis.

What Happened: On Tuesday, the OxyContin maker submitted a revised bankruptcy plan, offering a settlement of at least $7.4 billion for the opioid crisis. This decision follows the U.S. Supreme Court’s rejection of Purdue’s previous attempt to resolve the lawsuits through a bankruptcy settlement last year.

The new plan provides fresh details on how the settlement will be distributed among states, local governments, and individuals affected by the opioid crisis. The company intends to begin collecting votes and opt-in decisions from its creditors in May, with the plan to be presented to a U.S. bankruptcy judge for final approval upon completion.

Purdue will contribute $900 million from its funds and implement several non-monetary measures, including transitioning into a public benefit company focused on developing medications for opioid use disorder treatment and overdose reversal.

Under the revised plan, creditors can choose to participate in the settlement to receive payment. Individuals who choose not to participate in the settlement can pursue legal action against the Sacklers, the company’s owners, who have stated they will strongly contest the case in court.

The revised plan also allocates approximately $850 million to support individuals affected by the opioid crisis, including those who developed addiction after being prescribed OxyContin and infants born with withdrawal symptoms due to prenatal opioid exposure.

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Why It Matters: The opioid crisis, fueled by Purdue Pharma’s aggressive marketing of OxyContin in the 1990s, has claimed at least 106,000 lives in the U.S. Inappropriate prescribing of opioids was cited as one of the major causes of U.S. overdoses, according to the office of Dept. of Health and Human Services. This settlement, if approved, will conclude the most expensive corporate bankruptcy tied to the opioid epidemic.

The Sackler family and Purdue Pharma previously agreed to pay $7.4 billion to resolve nationwide opioid litigation, marking a major milestone in efforts to hold the makers of the addictive pain medication OxyContin accountable for their role in the opioid crisis. “This story is about a family of cruel billionaires who believed they were above the law,” said Connecticut Attorney General William Tong in a press release.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.