Purdue Pharma to Pay $7.4B Over Its Sales of Painkiller OxyContin

WASHINGTON — Attorneys general nationwide announced their approval Monday of a $7.4 billion settlement with pharmaceutical manufacturer Purdue Pharma over what they say was the company’s inappropriate marketing of opioids.

The powerful painkillers have been blamed for thousands of deaths each year and many thousands more drug addictions.

The settlement is awaiting final approval of a New York bankruptcy court, which is expected soon.

Purdue Pharma makes the opioid OxyContin. The company originally developed it for people who are immobilized by either acute or chronic pain, such as from injuries, arthritis or cancer. The feeling of euphoria it created proved to be addictive and even deadly.

Purdue Pharma is owned by the Sackler family, which claimed they followed all laws and did nothing wrong. The attorneys general argued that an aggressive marketing campaign by Purdue Pharma contributed to the deaths and addictions.

The $7.4 billion payout is to be spread out over the next 15 years. It will be apportioned to each state, the District of Columbia and U.S. territories based on their populations that received prescriptions for OxyContin.

New York Attorney General Letitia James, who helped lead the multistate lawsuit, praised the settlement as a “plan to hold the Sackler family accountable.”

“For decades, the Sacklers put profits over people, and played a leading role in fueling the epidemic of opioid addictions and overdoses,” James said in a statement.

The Sacklers agreed to pay $6.5 billion of the settlement total. The rest would come from Purdue Pharma.

In addition, individual plaintiffs who are not covered by the settlement still would have a right to sue.

Purdue Pharma L.P. filed for Chapter 11 bankruptcy in March in the U.S. Bankruptcy Court for the Southern District of New York.

A Feb. 9, 2022 Harvard T.H. Chan School of Public Health report said, “The current opioid crisis ranks as one of the most devastating public health catastrophes of our time.”

Purdue Pharma began marketing OxyContin in 1996 after winning approval from the Food and Drug Administration. In the first few years it was used as a prescription painkiller, only a few sporadic overdose deaths were reported.

The Centers for Disease Control and Prevention said the number of deaths climbed rapidly in three waves as the overdoses became an epidemic. After the first wave of prescriptions, the second wave resulted from an expansion of the heroin market to supply already addicted people, according to the CDC.

The third wave, starting around 2013, came from synthetic opioids like fentanyl that flooded the U.S. market, resulting in a sharp increase in overdose deaths.

At its peak in 2023, there were about 109,600 drug overdose related deaths, or roughly 300 per day, according to the CDC. Most of them were caused by prescription opioids like OxyContin or illicit synthetics.

Much of the litigation against the Sacklers and Purdue Pharma was directed at the company’s marketing campaign.

Part of it consisted of compiling data on doctors most likely to prescribe opioids. Purdue Pharma then used a bonus system that encouraged sales representatives to target their visits and pitches at doctors with high rates of opioid prescriptions.

In addition to an average sales representative’s salary of $55,000, their annual bonuses averaged $71,500 in 2001, according to the American Public Health Association. Purdue also more than doubled its internal sales force.

The company initially used a starter coupon program for OxyContin that offered patients a free prescription for a one week to 30-day supply, the American Public Health Association reported.

Purdue Pharma welcomed the settlement in a statement Monday that said, “Today’s announcement of unanimous support among the states and territories is a critical milestone towards confirming a Plan of Reorganization that will provide billions of dollars to compensate victims, abate the opioid crisis, and deliver opioid use disorder and overdose rescue medicines that will save American lives.”

If the settlement wins court approval, the Sacklers’ control of Purdue Pharma will be terminated and the firm’s assets will be transferred to a new public benefit company.

Purdue Pharma is one of several pharmaceutical makers or distributors that have been sued over opioids and forced to settle or pay plaintiffs. Others are McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceuticals.

The Purdue Pharma settlement adds to more than $50 billion in opioid pay-outs by corporations that made, distributed or sold opioid painkillers on the retail market. 

You can reach us at [email protected] and follow us on Facebook and Twitter