Purdue Pharma Faces $225M Forfeiture Sentencing, Unlocking $7B Sackler Settlement Over Opioid Crisis

Purdue Pharma’s $225 Million Forfeiture Sentencing Set for May 14

A federal judge is scheduled to sentence Purdue Pharma, the maker of OxyContin, to forfeit $225 million to the U.S. Justice Department on Tuesday, May 14, 2024. This sentencing clears the final legal hurdle for the company to finalize a sweeping settlement resolving thousands of lawsuits linked to its role in fueling the opioid crisis.

The penalty was agreed upon in a 2020 plea deal to resolve federal civil and criminal investigations into Purdue’s practices. Once approved, the company will avoid additional criminal forfeitures and fines totaling $5.3 billion in exchange for settling the remaining lawsuits.

Sackler Family to Pay Up to $7 Billion Over 15 Years

The broader settlement, approved by a judge in 2023, requires members of the Sackler family—who own Purdue Pharma—to contribute up to $7 billion over 15 years. The funds will be distributed to state, local, and Native American tribal governments, as well as individual victims and their survivors.

This settlement is among the largest in a series of agreements by drugmakers, wholesalers, and pharmacies in recent years. It is the only major opioid settlement that includes direct payments to some victims or their families. Collectively, these settlements exceed $50 billion, with most funds designated to combat the overdose epidemic.

Purdue’s Role in the Opioid Crisis

Purdue Pharma, based in Stamford, Connecticut, pleaded guilty to three federal criminal charges in November 2020. The company admitted to:

• Failing to implement an effective program to prevent the diversion of its powerful prescription painkillers to the black market, despite assurances to the U.S. Drug Enforcement Administration (DEA).
• Paying doctors through a speakers program to prescribe OxyContin.
• Colluding with an electronic medical records company to send doctors information on patients that encouraged increased opioid prescriptions.

While Purdue produced only a fraction of the opioid pills that flooded the U.S. market in the 2000s, its aggressive marketing of OxyContin is widely regarded as a catalyst for the opioid crisis. In a 1996 event to motivate Purdue’s sales force, Richard Sackler—then a top executive and later company president—called for a “blizzard of prescriptions.”

Key Terms of the Settlement

Under the agreement:

• The federal government will receive a portion of the $7 billion Sackler family payment.
• Purdue Pharma will cease to exist and be replaced by a new, publicly beneficial company called Knoa Pharma.
• Knoa Pharma will operate under a board appointed by state governments.
• The Sackler family will be shielded from future opioid-related lawsuits from parties who accept the settlement payments.

The reorganization of Purdue Pharma is considered one of the most complex in legal history, involving the dissolution of a major corporation and the creation of a new entity dedicated to public health.

Timeline of Key Events

• November 2020: Purdue Pharma pleads guilty to three federal criminal charges.
• 2020: Federal plea deal includes $225 million forfeiture and waiver of $5.3 billion in criminal penalties.
• 2023: Settlement approved by a judge, paving the way for implementation.
• May 14, 2024: Scheduled sentencing of Purdue Pharma’s $225 million forfeiture.
• May 1, 2024: Settlement is expected to take effect.