Supreme Court blocks Purdue Pharma’s $6B opioid settlement

SCOTUS blocked Purdue Pharma’s (maker of OxyContin) multi-billion-dollar bankruptcy plan on Thursday, which would have protected the Sackler family, who own the company, from future opioid crisis lawsuits.

A lower court had allowed the settlement to go forward, but the Biden Administration asked the Supreme Court to put it on hold last year.

According to the deal, which took a decade to arrive at, the Slackers would have had to pay $6 billion.

Part of the amount would have gone as compensation to over 100,000 opioid overdose victims and their families. In exchange, the Slackers wanted protection from all OxyContin-related cases.

Individual payments would have ranged from $3,800 to $45,000, with over $750 million allocated to individuals. Approximately 95% of victims and creditors had approved the plan.

In a 5–4 decision, Justice Neil Gorsuch, writing for the majority, ruled that such a protection violated bankruptcy law, as it didn’t have consent from all affected parties. Justice Brett Kavanaugh dissented, arguing that the decision harms victims and blocks recovery efforts.

The ruling means lawsuits against the Sacklers will resume in September if new settlements can’t be reached this summer—adding pressure to resolve the complex litigation that has cost Purdue over $1 billion in legal fees.

Purdue Pharma filed for bankruptcy in 2019 amid thousands of lawsuits alleging its role in the opioid epidemic, which has claimed nearly 645,000 lives from 1999 to 2021, according to the CDC.

The Slacker family made billions through Purdue’s OxyContin. None of the Slacker family members filed for bankruptcy.