After Purdue Pharma agreed to a $7.4 billion settlement, the Sackler family, the company’s founders, could see a hit to their net worth.
The company announced its settlement with all 55 attorneys general on Monday after longstanding allegations the company and the Sacklers played a role in creating and worsening the opioid crisis in America.
Why It Matters
Nearly 100,000 people die from opioids every year, making up the bulk of drug overdoses in the U.S.
Across the country, Connecticut, New York, California, Colorado, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and West Virginia led in negotiating the settlement agreement with Purdue Pharma and the Sacklers for their involvement in the opioid crisis.
What To Know
This settlement, reached with all 50 states, Washington, D.C., and U.S. territories, requires the Sacklers to relinquish ownership of Purdue Pharma and bars them from engaging in future opioid sales in the country.
The deal represents the largest settlement to date involving individuals held responsible for the opioid epidemic, which has resulted in significant financial and reputational consequences for the Sackler family.
The $7.4 billion settlement also comes alongside a commitment by the company to dissolve and transfer its assets to a new company.
The Sacklers will also have no ownership interest or role in the new company, consistent with how they’ve had no involvement in Purdue since the end of 2018, the company said.
“Today, every single attorney general, representing all states and territories nationwide, has signed onto an historic settlement that permanently ends the Sacklers’ control over Purdue and their ability to ever sell opioids again, and forces the company and the family to pay $7.4 billion for their role in igniting one of the most devastating public health crises in American history,” Connecticut Attorney General William Tong said in a statement.
That amount is $1.4 billion more than the settlement reached in 2022, and $3.1 billion more than the settlement Connecticut rejected in 2021.
“I will continue to urge that the millions of dollars Connecticut receives be used to save lives through opioid treatment and prevention, as well as to provide direct support to victims and their families,” Tong said.
The settlement alleges that Purdue, while owned by the Sacklers, aggressively marketed opioid products for decades, leading to the opioid epidemic on a larger scale. The money will go toward local communities to support addiction treatment and prevention.
In the first payment, the Sacklers are set to pay $1.5 billion, with Purdue paying another $900 million for affected communities. The company will then be responsible for paying $500 million the next year, another $500 million in two years and $400 million after three years.
“What’s interesting about the $7.4 billion Purdue Pharma settlement is that it’s entirely being funded by the company and the Sackler family, unlike other opioid settlements that involved intermediaries like Walmart, CVS, and distributors,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
“One of the biggest shifts here was the Supreme Court blocking the Sackler’s from using bankruptcy protection, forcing them to pay directly. That decision alone changes the stakes for both accountability and restitution.”
The total value of the settlement is scheduled for distribution over 15 years, and the funds will primarily support opioid addiction prevention, treatment, and recovery initiatives nationwide.
The Sackler family members included in the settlement include the eight heirs of Purdue founders Raymond and Mortimer Sackler who served on the Board of Purdue: Richard, Kathe, Mortimer Jr., Ilene, David, and Theresa Sackler as well as the estates of Jonathan and Beverly Sackler.
While the Sacklers have denied any wrongdoing, the settlement strips them of ownership and control of Purdue Pharma, which will be restructured as a public benefit corporation.
Profits from the restructured company will be directed exclusively to address the opioid crisis rather than private owners. This move significantly alters the family’s involvement—and revenue—from the pharmaceutical sector.
Purdue Pharma, under Sackler family leadership, introduced and promoted OxyContin beginning in the 1990s, aggressively marketing opioid products and facing mounting legal challenges as overdose deaths and addiction rates soared across the United States.
What Is The Sackler’s Net Worth?
The new settlement increases a previous offer overturned by the Supreme Court from $6 billion to $7.4 billion, emphasizing both the financial and legal pressure on the Sackler fortune.
Although the payments are substantial, details on the family’s exact remaining wealth after settlement disbursements have not been disclosed by the parties involved. As of 2024, the family’s collective net worth was estimated at $10.8 billion.
“This ruling is a massive blow,” Thompson said. “Their assets are now being tapped for restitution to the millions of victims, which will severely impact their liquid net worth which is reported to be roughly $11 billion.”
Newsweek reached out to Purdue Pharma and the Sackler family via email.
What People Are Saying
Purdue Board Chairman Steve Miller said in a statement: “Following the 2024 Supreme Court ruling, we doubled down on our commitment to work with our creditors to design a new Plan that delivers unprecedented value to those affected by the opioid crisis. Today’s filing is a major milestone in that effort. We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good.
Connecticut Attorney General William Tong said in a statement: “There will never been enough justice, accountability or money to restore the families whose lives have been wrecked or to right the terrible consequences of the Sackler family’s craven misconduct. What we announce today is both momentous and insufficient, the culmination of years of tumultuous negotiations and legal battles all the way up to the U.S. Supreme Court.”
What Happens Next
The local government sign-on and voting solicitation process for the settlement will depend on bankruptcy court approval. A hearing is scheduled in the coming days.
“The settlement could hopefully mark the beginning of a shift in the war against the epidemic, as funding would not only be available to thousands of victims who filed lawsuits, but those dollars could also be used to back prevention and recovery programs nationwide,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
The post How Opioid Settlement Could Change Sackler Family Net Worth appeared first on Newsweek.
