Purdue Pharma, formerly in the forefront of the U.S. opioid epidemic, is seeking to reestablish itself in public discourse as a new public benefit firm. Following the Supreme Court’s rejection of a previous bankruptcy deal, the pharmaceutical company has proposed a revised plan that aims to allocate about $7.4 billion to its lenders.
The firm aims to conclude the Chapter 11 bankruptcy proceedings initiated in 2019 with a newly submitted reorganization plan to the U.S. Bankruptcy Court for New York Southern District. Purdue said in a news release that the plan includes over $7.4 billion in payments in order to compensate victims of the opioid epidemic and to mitigate the effects of the crisis.
The $7.4 billion total includes accessible company cash and contributions from the Sackler family, the affluent family that led the corporation until 2019.
The Sacklers pledged $6.5 billion in annual payments over the following 15 years, including an initial payment of $1.5 billion on the day the program begins. The family may further give $500 million if the multinational pharmaceutical firm they are required to sell generates certain earnings.
Purdue would provide all of its assets, amounting to an anticipated $900 million from the firm, available for immediate distribution.
Approximately 140,000 individuals have filed legal claims regarding purported injuries from Purdue’s opioid medicines; however, only approximately 10% of the total settlement sum will be allocated to individual victims, as reported by CBS News, referencing a recent status report submitted by case mediators. 90% of the remainder would be allocated to other creditors, a substantial group including insurance firms, drugstore chains, several hospitals, and 48 states.
The proposal awaits acceptance from the bankruptcy court, which is anticipated to conduct a hearing in May. Following prospective court approval, Purdue would seek votes to finalize the proposal.
Purdue anticipates that a large portion of its creditors will endorse the revised strategy after extensive deliberation.
“We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good,” Purdue’s board chairman Steve Miller stated.
Upon approval of the deal, Purdue would remain a public benefit corporation dedicated to enhancing public health, governed by a newly established independent foundation. The firm will remain subject to a stringent operational injunction, and the Sacklers will retain no involvement in its affairs.
The public benefit company designation is a requirement imposed by the U.S. Justice Department after Purdue’s guilty plea in 2020 to a three-count criminal charge related to its allegedly deceptive OxyContin marketing practices. Since that time, the company has been working to repair its public image and received FDA clearance in 2024 for its emergency opioid overdose rescue therapy, Zurnai, a nalmefene injection.
The Sacklers had pledged a total payment of $6 billion in a bankruptcy deal that would have granted the family protection from civil litigation. The idea was thwarted in 2023 by a prominent Supreme Court dismissal.
