Attorney General Tong Compels Purdue Pharma and Sackler Family to Pay $6 Billion to Victims, Survivors and States(Hartford, CT) – Attorney General William Tong announced today Purdue Pharma and the Sackler family will pay $6 billion to victims, survivors, and states for their role in the opioid epidemic—40 percent more than the previously vacated settlement appealed by Connecticut.
As part of the agreement, the Sackler family must apologize and allow institutions to remove the Sackler name from buildings and scholarships. Connecticut will receive approximately $95 million from the settlement which will be used to fund opioid treatment and prevention. The agreement authorizes Connecticut to use a portion of the settlement funds to establish an Opioid Survivors Trust to directly aid survivors and victims of the opioid epidemic.
The settlement keeps intact provisions of the Purdue bankruptcy plan forcing the company to be dissolved or sold by 2024 and banning the Sacklers from the opioid business in the United States and around the globe. The initial bankruptcy plan required Purdue and the Sacklers to make public over 30 million documents. The settlement announced today forces disclosure of additional records previously withheld as privileged legal advice.
Today’s announcement is a civil settlement. Neither this agreement nor the prior bankruptcy plan releases the Sacklers from any potential future criminal liability.
Today’s settlement is the product of a court-ordered mediation, which began on January 3 under Judge Shelley C. Chapman. The mediation was extended three times by the Bankruptcy Court and included dozens of in-person and telephonic negotiation sessions.
Settlement highlights include:
• The Sackler families must pay $6 billion to the states—$1.675 billion and nearly 40 percent more than the initial bankruptcy plan. The final payments are spread over 18 years, with larger payments frontloaded so that State will receive more money, sooner as compared to the previous bankruptcy plan.
• The Sackler families must apologize for their role in the opioid epidemic, and to the victims whose lives have been devastated.
• The Sackler family must allow institutions to remove the family name from buildings, scholarships, and fellowships.
• Responding to Connecticut’s demand, mediator Judge Shelley C. Chapman strongly urged the Bankruptcy Court to require the Sacklers to participate in a public hearing where victims and their survivors would be given an opportunity to directly address the family.
• Purdue must make public additional documents previously withheld as privileged legal advice, including legal advice regarding advocacy before Congress, the promotion, sale, and distribution of Purdue opioids, structure of the Purdue Compliance Department and its monitoring and abuse deterrence systems, and documents regarding recommendations from McKinsey & Company, Razorfish, and Publicis related to the sale and marketing of opioids.
• The settlement is conditioned upon approval by the bankruptcy court, on the Second Circuit’s reversal of the District Court’s order, and consummation of the bankruptcy plan.
“Five months ago, Connecticut said no to a Purdue bankruptcy plan that allowed the Sackler family to purchase lifetime legal immunity without so much as an apology. After months of negotiation and consultation with victims and their families, Connecticut has forced Purdue Pharma and the Sacklers to pay a $6 billion settlement and apologize in dollars, words, and actions. Connecticut will use its $95 million share to save lives through opioid treatment and prevention, and I will push to establish a Connecticut Opioid Survivors Trust to provide direct relief to victims and their families. But this fight has never been about the money. After years of lies and denial, the Sackler family must now directly apologize for the pain they have caused. They must reckon face-to-face with the survivors of their reckless greed at a public hearing. Museums and universities may now scrub the tarnished Sackler name from their walls—ensuring this family is remembered throughout history for their callous disdain for human suffering and nothing else,” said Attorney General Tong. “This settlement is both significant and insufficient—constrained by the inadequacies of our federal bankruptcy code. But Connecticut cannot stall this process indefinitely as victims and our sister states await a resolution. This settlement resolves our claims against Purdue and the Sacklers, but we are not done fighting for justice against the addiction industry and against our broken bankruptcy code.”
Connecticut first filed suit against Purdue and individual members of the Sackler family in 2018, alleging that the company and family peddled a series of falsehoods to push patients toward its opioids, reaping massive profits while opioid addiction skyrocketed. Connecticut expanded and amended that suit in 2019 to add additional defendants and allegations, including the fraudulent transfer of hundreds of millions of dollars from Purdue Pharma to the Sacklers to shield their wealth from accountability.
Purdue Pharma filed for bankruptcy in September 2019. In 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan that granted a lifetime legal shield to the Sackler family, unlawfully blocking states like Connecticut from pursuing claims against the family. The plan required the Sackler family to pay $4.3 billion over nine years to the states, municipalities and plaintiffs that sued the company. California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia objected to and ultimately appealed the plan. The United States Trustee, an arm of the Department of Justice, also appealed.
In December 2021, the U.S. District Court vacated the Purdue bankruptcy order, agreeing with the non-consenting states that the bankruptcy court lacked authority to force states to release their claims against the Sackler family. Purdue has appealed to the United States Court of Appeals for the Second Circuit, and that appeal will proceed. Should the case land in the U.S. Supreme Court, Connecticut reserves its right to continue its fight against non-consensual non-debtor releases.
Attorney General Tong testified last year before the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law in support of reforms to bankruptcy laws that would prohibit non-bankrupt individuals and businesses from exploiting loopholes in the bankruptcy code to evade accountability.
Taking on the Addiction Industry
Over the past year alone, Connecticut has led negotiations that will bring $32.5 billion in new funds nationwide to fight the opioid epidemic, including approximately $400 million to Connecticut alone. In addition to the latest Purdue settlement, two major settlements reached in the past year include:
• Distributors: Pharmaceutical distributors Cardinal, McKesson, and AmerisourceBergen and manufacturer Johnson & Johnson enabled the flood of deadly addictive painkillers into our communities. They will pay $26 billion, including approximately $300 million to Connecticut over the next 18 years to fund treatment, prevention, and recovery programs. This is the second largest multi-state cash settlement in history, second only to the historic tobacco settlement.
• McKinsey & Company: The consulting giant will pay $573 million, including $7.5 million to Connecticut, over the next five years for their role in advising Purdue Pharma in turbocharging the opioid epidemic.
Attorney General Tong and Governor Ned Lamont have urged the Connecticut General Assembly to approve legislation to ensure Connecticut’s funding from these landmark settlements is dedicated toward evidence-based strategies to save lives and fight the opioid epidemic.
Special Counsel for Opioids Matthew Fitzsimmons, Solicitor General Clare Kindall, Deputy Associate Attorney General Jeremy Pearlman, Assistant Attorneys General Sara Nadim, Ann-Marie DeGraffenreidt, John Wright, and Alma Nunley, Legal Investigator Caylee Ribeiro, Paralegal Specialists Lynn Rioux, Samantha Klein, and Cheryl Turner, Administrative Assistant Melissa Gordon, prior Special Counsel for Opioids Judge Kimberly Massicotte, and retired Assistant Attorney General Eleanor Mullin are assisting or previously assisted the Attorney General in this matter.