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A New York judge has approved Purdue Pharma's bankruptcy plan, which will release billions of dollars to opioid plaintiffs nationwide. The decision, announced by U.S. Bankruptcy Judge Sean Lane, requires the Sackler family, owners of Purdue, to pay up to $7 billion over 15 years to address the opioid crisis. This plan will dissolve Purdue Pharma, the maker of OxyContin, and transform it into Knoa Pharma, a public benefit company focused on producing opioid overdose reversal medications.
The settlement is among the largest in a series of opioid-related agreements, totaling around $50 billion, aimed at addressing the crisis that has resulted in approximately 900,000 deaths in the U.S. since 1999. Purdue's plan, which received overwhelming support from creditors, will allocate funds to states, local governments, and Native American tribes, as well as individual victims and families affected by opioid addiction.
While the Sackler family will relinquish ownership of Purdue, they will not face personal bankruptcy. However, the new agreement allows for lawsuits against them by entities not participating in the settlement. The company will also release internal documents related to its opioid marketing practices. Payments to victims are expected to begin next year, with individual compensation ranging from $8,000 to $16,000, depending on the duration of OxyContin use and the number of claimants.
The plan marks the end of a long legal battle that has seen Purdue file for bankruptcy in 2019 amidst thousands of lawsuits. Judge Lane's approval follows the rejection of a previous settlement by the U.S. Supreme Court last year, which had improperly shielded the Sacklers from future lawsuits.
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