Judge conditionally OKs Purdue Pharma deal

A federal bankruptcy judge gave conditional approval Wednesday to a sweeping settlement that will remove the Sackler family from ownership of OxyContin maker Purdue Pharma and devote potentially $10 billion to fighting the opioid crisis that has killed a half-million Americans over the past two decades.

If it withstands appeals, the deal will resolve a mountain of 3,000 lawsuits from state and local governments, Native American tribes, unions and others that accuse the company of helping to spark the overdose epidemic by aggressively marketing the prescription painkiller.

Under the settlement, the Sacklers will have to get out of the opioid business altogether and contribute $4.5 billion. But they will be shielded from any future lawsuits over opioids.

The drugmaker itself will be reorganized into a new charity-oriented company with a board appointed by public officials and will funnel its profits into government-led efforts to prevent and treat addiction.

Also, the settlement sets up a compensation fund that will pay some victims of drugs an expected $3,500 to $48,000 each.

After an all-day hearing in which he analyzed the plan’s pros and cons for a nonstop 6 ½ hours, U.S. Bankruptcy Judge Robert Drain said he would approve it as long as two relatively small changes were made. If so, he said, he will formally enter the decision on Thursday.

He said that while he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through lawsuits instead of a settlement would be complicated.

The deal comes nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of the lawsuits.