A pay-out worth up to $10 billion by OxyContin manufacturer Purdue Pharma, in settlement of lawsuits over its role in the opioid crisis, has been conditionally approved by a US federal bankruptcy judge.

OxyContin overdoses have killed a half-million Americans over the past two decades, and settlement of thousands of lawsuits, with both state and local governments, is now entering final negotiation phase.

Purdue Pharma was accused of chasing profits through aggressive sales of its prescription painkiller, despite knowledge of its addictive effects, which led to a nationwide opioid crisis.

Addicts

Under the settlement, oxycontin addicts will receive compensation of between $3,500 and $48,000 each. Opioid-linked deaths in the US stood at 70,000 last year.

The Sackler family, which founded the pharmaceutical business, will relinquish ownership of the company, and personally pay up to $4.5 billion.

No immunity

They will also be protected from any future lawsuits over opioids, though they are not given immunity from criminal charges.

Former Purdue board member David Sackler had testified that family members would not accept the agreement unless it protected them from lawsuits. 

Purdue is to be reorganised under a new board, appointed by public officials. 

Its profits will feed into government-led efforts to prevent and treat opioid addiction.

Two years ago, the Stamford, Connecticut, pharma giant filed for bankruptcy.

Almost 3,000 lawsuits had been filed against it – from states, local governments, Native American tribes, hospitals and unions.

Many state and local governments backed the settlement plan, but some – including Washington DC and Seattle – opposed it over the protections granted to the Sackler family.

The US bankruptcy trustee, which seeks to protect the nation’s bankruptcy system, was also against the settlement.

Appeal

Washington state attorney general Bob Ferguson said that he would appeal against the plan, calling it inadequte.

US bankruptcy judge Robert Drain said yesterday that he would approve the plan as long as two technical changes were made.

Before the ruling, the judge said that, while he did not have “fondness for the Sacklers or sympathy for them”, collecting money from them through litigation would be complex.

The White Plains, New York-based judge said that drawn-out litigation would delay getting settlement money to victims.

“Bitterness over the outcome of this case is completely understandable,” Drain said.

“But one also has to look at the process and the issues and risks and rewards and alternatives of continued litigation versus the settlement laid out in the plan.”

No apology

Drain noted that none of the four Sacklers who testified offered an explicit apology.

“A forced apology is not really an apology, so we will have to live without one,” he said.

The scandal has destroyed the reputation of the Sackler family, formerly known for their philanthropy.

However, it is understood that some of their fortune remains intact.

Many museums and art galleries have removed the Sackler names from wings paid for by their donations.

The settlement also means that the Sackler family must get out of the opioid business worldwide.