Purdue Pharma Dissolves After Judge Approves Final Criminal Sentence

Historic Settlement Brings End to OxyContin Maker

A federal judge on Tuesday delivered a criminal sentence to the company to resolve a U.S. Department of Justice probe — a last necessary step to clear the way for the settlement. OxyContin maker Purdue Pharma could be dissolved and replaced by a company focused on the public good by the week's end, as a massive legal settlement resolving thousands of lawsuits is set to take effect. OxyContin maker Purdue Pharma is expected to be ordered to pay $225 million in a criminal case related to how it sold its blockbuster opioid painkiller.

U.S. District Judge Madeline Cox Arleo made her decision after listening to hours of impact statements from people who lost loved ones or struggled with addiction themselves and requested she reject the negotiated sentence. While she didn't go that far, she said she sympathized with people who bore the brunt of an epidemic linked to more than 900,000 deaths in the U.S. "It was a purposeful, intentional and sophisticated crime scheme," she said.

Purdue says that if the judge issues the criminal sentence Tuesday, the settlement could take effect as soon as Friday. The dissolution marks the end of the company that helped fuel America's opioid crisis through aggressive marketing of its powerful painkiller.

Victims Speak Truth to Power

Arleo on Tuesday heard in person and by teleconference from people impacted by opioids in several ways: mothers who lost sons to overdose, a teenager born into withdrawal and whose mother later died, and people who were prescribed OxyContin after accidents and spent years dealing with addiction treatment and financial and emotional turmoil. Inside the court, 31 people were allowed to tell their painful stories to the judge both remotely and in person.

"There's no words to describe how hard this loss has been," Tiffineee Baker said, adding her 26-year-old son died of fentanyl poisoning after getting addicted to OxyContin. "Justice to me looks like more than just money," she said. Outside the courthouse, protesters held paper headstone cutouts with photos of their deceased relatives, demanding accountability beyond financial penalties.

After listening to victims for about five hours Tuesday, the judge told them that she would keep photos of loved ones they lost to opioids in her chambers as long as she serves as a judge. Judge Arleo expressed frustration with federal prosecutors, noting the irony that "It is not lost on me that those who started the epidemic will not serve a sentence."

Financial Settlement Details and Controversy

The settlement, which Purdue says could take effect as soon as Friday, calls for members of the Sackler family who own the company to contribute up to $7 billion over 15 years. The settlement is among the largest in a series of settlements by drugmakers, wholesalers and pharmacies in recent years — and the only major one that includes payments for some individual victims or their survivors. Payments to individual victims are expected to range from about $8,000 to about $16,000.

However, the agreement has drawn criticism for its limited scope. But the federal government agreed in a negotiated settlement to collect just $225 million in exchange for Purdue reaching a separate settlement of the thousands of lawsuits it faced from state, local and Native American tribal governments, along with other groups. Purdue's guilty plea did not include restitution to victims.

Under the Purdue deal, members of the Sackler family will be shielded from lawsuits over opioids from those who agree to the payments. This protection for the Sackler family has been particularly contentious among victims' advocates who wanted to see individual accountability for the crisis.

A New Chapter in Opioid Crisis Response

Purdue reached a deal with the Justice Department in 2020 to resolve criminal and civil probes the company was facing. The Stamford, Conn.,-based company admitted it did not have an effective program to keep its powerful prescription painkillers from being diverted to the black market, even though it told the U.S. Drug Enforcement Administration that it did. It also admitted it paid doctors through a speakers program to prescribe the drugs and paid an electronic medical records company to send doctors information on patients that encouraged more opioid prescriptions.

Overall, the settlements are worth more than $50 billion, and most of the money is to be used to address the overdose epidemic.