Purdue Pharma’s $7.4B Settlement Gains Unanimous State Support
America ı By Rihem Akkouche
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In a legal saga that has gripped a nation haunted by the ravages of addiction, Purdue Pharma’s $7.4 billion opioid settlement surged forward Monday with full-throated support from all 55 U.S. states and territories, marking a dramatic turning point in America’s war against corporate-fueled drug epidemics.
Nearly a year after the U.S. Supreme Court derailed Purdue’s previous bankruptcy plan, this newly restructured settlement—hailed by many as a long-awaited reckoning—puts the Sackler family, Purdue’s owners, on the financial firing line.
“For decades, the Sacklers put profits over people,” declared New York Attorney General Letitia James. “This plan finally begins to hold them accountable.”
Billions on the Table, Billions to Be Paid
As part of the massive restructured deal:
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$6.5 billion will come directly from the Sackler family, a $2 billion increase over their 2021 offer.
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Purdue Pharma itself will kick in $900 million toward the settlement fund.
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Initial payments—totaling most of the funds—will be distributed within the first three years, with the remainder spread across 15 years.
States already know their shares:
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New York: $250 million
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North Carolina: $150 million
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New Jersey: $125 million
The plan will be voted on following approval of a disclosure statement at a New York bankruptcy court hearing Wednesday.
Supreme Court Ruling Forces Major Overhaul
This latest settlement wasn’t born in a vacuum—it emerged from the wreckage of Purdue’s earlier plan, which was overturned in June 2024 when the Supreme Court ruled that Chapter 11 of the Bankruptcy Code does not authorize nonconsensual third-party liability releases.
That ruling dismantled a key provision shielding the Sacklers from lawsuits without direct claimant approval. The new plan incorporates a workaround: an opt-in mechanism, where claimants must affirmatively consent to releasing their direct claims against the family.
Purdue to Morph into a Public Trust
Perhaps the most transformative element of the plan? The Sacklers will lose all control of Purdue Pharma. If approved, Purdue's assets will be transferred to a new public benefit company, whose sole mission will be to provide opioid rescue medications, addiction treatment, and resources for abatement.
“This plan will deliver billions of dollars to compensate victims, abate the opioid crisis, and deliver life-saving medicines,” Purdue stated. “Unanimous support from every state and territory is a milestone.”
A Nation United Against an Epidemic
Backing came not just from the 50 states, but also from American Samoa, Guam, Puerto Rico, the Northern Mariana Islands, and the U.S. Virgin Islands—a rare show of unanimity in a fragmented legal landscape.
The Covington & Burling LLP team did not lead this charge alone—behind the scenes, dozens of attorneys general and creditor committees wrestled for months to shape a settlement that could survive judicial scrutiny and satisfy public demands for justice.
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