New York Judicial Court Judge Sean H. Lane has confirmed that he will approve the resolution plan for pharmaceutical company Purdue Pharma. The drug company is emblematic of how little abuse the sector sees in the opioid crisis, as it aggressively commercializes the painkiller OxyContin as if it were not addictive. The restructuring will help the company, owned by the Sackler family, emerge from the crisis and prepare for dissolution. The plan includes an agreement to pay her $7.4 billion in damages to settle charges that hold her responsible for sparking one of the largest public health crises in U.S. history.
All state governments, approximately 2,600 cities, counties, Native American tribes, hospitals, and other organizations seeking to recover costs resulting from the opioid crisis from Purdue Pharma may now be able to recover a portion of the compensation.
A federal judge is now nearing the end of a process that began decades ago with the first charges for oxycodone-inducing addiction. The company declared a moratorium on payments in 2019 after receiving a flood of complaints from those affected and before the lawsuit was filed in New York state court in Chievras. “I’m announcing that I intend to review the plan,” Lane said at a public hearing in White Plains, New York. The final verdict is expected to be announced in March this year.
The Purdue Pharma case is typical of the opioid epidemic that has plagued the United States in recent years. The company manufactured and marketed the OxyContin painkiller so aggressively that it became the first drug prescribed by doctors for chronic pain. This pastilla has hooked thousands of Americans and sparked the worst health crisis since the AIDS pandemic of the past eight years. It is estimated that more than 700,000 people have died from drug addiction in the past few decades. Taking oxycodone, the active ingredient in OxyContin, has been the gateway for thousands of patients to fentanyl, a synthetic drug 50 times more potent than morphine.
“In March 2025, Purdue Pharma filed a new plan of reorganization under Chapter 11 (regulating certification contests) and a corresponding helpful declaration in the Federal Court of Chievras, Southern District of New York,” the company announced through a statement explaining that the plan is effective starting in March. “After emerging from bankruptcy, a new utility company will be created that is dedicated to improving the lives of Americans,” he added.
The plan, with the participation of all believers, includes $7.4 billion in cash to compensate victims and alleviate the opioid crisis, the company said. You must accept the contract to receive all payments. “Alternatively, the certifier may retain the right to take legal action against the shareholder if the certifier does not accept the waiver of shareholder rights contained in the plan,” the handout says.
Purdue Pharma declared bankruptcy in 2019 after receiving more than 600,000 insurance claims over opioid addiction problems caused by its star drug OxyContin. The bankruptcy proceedings resulted in more than $40 billion in claims against the company. A year after the quiet trial began, the company declared itself guilty of federal charges of conspiracy and fraud for its aggressive business practices.
This case is historic because of the severe harm it caused to thousands of people in the United States and the amount of compensation, but most importantly because of the U.S. Supreme Court’s decision to void the company’s previous resolution agreement in 2024. Under the previous agreement, the company’s owners, the billionaire Sackler family, pledged to put up $6 billion in compensation, but were shielded from possible civil liability and fraud claims against the family that controlled the company and received Penguin’s dividends for years. After this decision, the parties had to negotiate a restructuring plan again.
This Supreme Court decision changed the treatment of losses resulting from compensation claims. Since then, indemnity bankruptcies have not permitted a complete release of liability by the company’s owners if all opioid-related plaintiffs did not agree to the agreement.
Under the new contract, the Sacklers will contribute approximately $6.5 billion in installments over 15 years. According to Bloomberg, the Supreme Court’s decision also gives believers the option of not abandoning their claims against the family that owns Purdue Pharma. Funds from the agreement will be used to reduce opioid consumption, and an additional $850 million will be used to compensate people and families with addiction complaints.
Purdue will transfer its commercial assets to a public utility company called Knorr Pharma that will develop and market medicines to reverse opioid overdoses and treat addiction. OxyContin will continue to be sold, but in a more controlled manner and limited to certain cases. Your benefit funds research into addiction.
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