Opioid settlement: Will it affect the Sackler family’s net worth?

Do you remember the Sackler family? The billionaire clan who amassed their fortune from Purdue Pharma, the notorious producer of OxyContin? In 2023, they sit on an estimated fortune of $10.8 billion, even after grappling with lawsuits connected to their role in the devastating opioid crisis. 

What does all of this mean for the family’s net worth? Let’s take our own look and see what the numbers have to say in reality.

Facing the Music

Without admitting any wrongdoing, the Sacklers have offered a settlement in the ballpark of $10 to $12 billion. In a pivotal moment in September 2019, Purdue Pharma filed for bankruptcy, paving the way for its transformation into a public benefit corporation. Stepping up, the Sackler family agreed to pay $3 billion towards the settlement to support those affected by the opioid crisis.

Additionally, they reached into their deep pockets to pay $225 million to the Department of Justice as part of a 2020 settlement, addressing their alleged role in the opioid epidemic.

The latest in the saga unfolded on a Tuesday, when a federal appeals court stamped its approval on a deal granting immunity to the Sacklers from current and future civil claims about the company’s role in the opioid crisis. This decision by the U.S. Court of Appeals for the 2nd Circuit signals a potential settlement that would force the Sacklers to part with tp to $6 billion from their painkiller-fueled wealth. 

This green light comes after years of contention with Purdue Pharma, widely criticized for its aggressive marketing of OxyContin and accused of obscuring the dangers of these dangerously addictive pills. As much as this may seem like a drop in the bucket for the family, their net worth suggests otherwise.

Turning the Tide

While Purdue Pharma crumbled under a wave of lawsuits and declared bankruptcy in 2019, the vast settlement was stalled. A judge in 2021 contended that the Sacklers, who hadn’t filed for bankruptcy themselves, could not be shielded from liability. As the years rolled on, states, local governments, and those affected by the opioid crisis waited in frustration for the release of funds to treat addiction and fund preventative programs.

So, does Tuesday’s ruling spell an end to these long-standing cases and the resentment surrounding the immunity deal?

The plan proposes that Purdue will be dissolved and reborn as Knoa Pharma. This new entity will be governed by a public board, producing medications for addiction treatment, including OxyContin. The profits will be pumped into programs to prevent and treat addiction itself, amassing hundreds of millions over time.

Around $750 million of the settlement will be directed towards families and individuals grappling with the opioid crisis, with expected payouts ranging between $3,500 to $48,000.

Finding a Way Forward

Connecticut Attorney General William Tong, while expressing discontent with the immunity protections, acknowledged that the settlement could offer much-needed relief to families of victims and survivors of addiction. He conceded, “There’ll never be enough justice to match the depths of pain and suffering the Sackler family caused,” emphasizing the urgency of funneling funds to communities fighting the opioid epidemic.

The Sackler families expressed satisfaction with the decision, emphasizing their commitment to providing substantial resources to those in need. But this is not the end of the story, especially according to their estimated $13 billion net worth. The settlement could be appealed to the U.S. Supreme Court, although this seems unlikely as almost all parties have agreed to the deal.

Ripple Effect

The opioid crisis has put other drug manufacturers and pharmacy chains in the crosshairs as well. Last year, CVS and Walgreens also settled their own lawsuits totaling $10 billion after years of litigation.

But the question remains: Is the end of the litigation tunnel in sight, or are we only seeing the tip of the iceberg?

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