Supreme Court to Decide on Purdue Pharma Bankruptcy Deal and Sackler Family Immunity

The controversial settlement, which could shield the Sackler family from future opioid-related lawsuits, has been challenged by the US Trustee Program, raising constitutional questions.

The Supreme Court is set to hear arguments on whether a bankruptcy plan can be engineered to give legal immunity to a third party — in this case, members of the Sackler family, who once controlled Purdue Pharma — even though they themselves have not declared bankruptcy.
The bankruptcy deal in question would have the Sackler family personally pay out between $5.5 billion to $6 billion over 18 years to help fight the ongoing opioid epidemic. Most of the money would go to states, local governments and Native American tribes.
The deal also sets aside $700 million to $750 million to pay individual victims and families of victims. The fund would pay out between $3,500 to $48,000, with payments to some victims spread out over 10 years.
If the deal were to be approved by the Supreme Court, Purdue Pharma would cease to exist and a new company, Knoa Pharma, would be created in its place. Knoa Pharma would develop and distribute opioid addiction treatments and overdose reversal medicines, while continuing to produce Purdue Pharma products, including OxyContin.
The US Trustee petitioned the Supreme Court to review the deal, calling it an “abuse” of the bankruptcy system. Barring individual victims from pursuing their own lawsuits against the Sackler family “raises serious constitutional questions,” the department argued.