Attorney General Formella Announces Up To $6 Billion National Settlement with Purdue Pharma and Sacklers; New Hampshire to Receive $46 Million if Agreement Approved

Attorney General John M. Formella today announced a national settlement with Purdue Pharma and its owners, the Sackler family, for their role in the opioid crisis, that will increase the amount of funds paid by the Sacklers from $4.325 billion under the original bankruptcy plan to at least $5.5 billion.

The settlement funds, which could increase the total amount being paid by the Sacklers to up to $6 billion if certain conditions are met, will be used to fund opioid treatment and prevention. As part of the agreement, the Sackler family must provide a statement of regret and allow institutions to remove the Sackler name from buildings and scholarships. If approved, New Hampshire will receive approximately $46 million from the settlement. The result is an increase over the $27 million allocated to New Hampshire in Purdue’s original bankruptcy plan—a plan objected to by Attorney General Formella.

“I would like to thank the Attorney General for forcing Purdue Pharma and the Sackler family back to the negotiating table to secure a better deal for New Hampshire,” said Governor Chris Sununu. “This necessary financial relief will help New Hampshire continue to make substantial progress in our fight against this crisis, and this settlement will deter irresponsible actions that would fuel this epidemic further.”

“New Hampshire has been particularly hard hit by the opioid epidemic, and Purdue Pharma and the Sackler family bear significant responsibility for causing so much harm to our state,” said Attorney General Formella. “While no amount of money will be enough to address the harm they caused, this settlement is a significant step toward holding the Sacklers accountable for what they did and will provide much needed funds for our state to continue fighting this epidemic.”

The settlement keeps intact provisions of the original Purdue bankruptcy plan forcing the company to be dissolved or sold by 2024 and banning the Sacklers from engaging in the manufacture and sale of opioids. The original bankruptcy plan required Purdue and the Sacklers to make public over 30 million documents, and this too remains intact. The settlement announced today forces disclosure of additional records previously withheld as privileged legal advice.

Today’s settlement is the product of a court-ordered mediation, which began on January 3, 2022. Settlement highlights include:

• The Sacklers must pay $1 billion above the original bankruptcy plan, as well as an additional $175 million which was previously conditioned on certain approvals, but which now must be paid on the bankruptcy effective date. The payments are spread over 18 years.
• The Sacklers must pay up to an additional $500 million in the event the sale of certain of their assets reaches a specified benchmark.
• The Sacklers must issue a statement of regret 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 state requests, the mediator urged the Bankruptcy Court to require the Sacklers to participate in a March 9, 2022 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.
• States reserve their rights to oppose non-consensual, non-debtor releases before the U.S. Supreme Court, should an appeal be heard there.

New Hampshire initiated its investigation of opioid companies in 2015 and sued Purdue and members of the Sacker family in 2017 and 2019, respectively, alleging that the Sacklers directed Purdue’s strategy to sell their opioids through a deceptive marketing campaign that minimized the health risks of opioids, and claimed that prescription drugs were rarely the cause of abuse, addiction, or death. They reaped massive profits while opioid addiction skyrocketed.

Purdue Pharma filed for bankruptcy in September 2019. In 2021, the Bankruptcy Court approved a bankruptcy plan deemed inadequate by several attorneys general, including Attorney General Formella, that granted a lifetime legal shield to the Sackler family, unlawfully blocking states like New Hampshire from pursuing claims against the family. That plan required the Sackler family to pay $4.325 billion over nine years to the states, municipalities, and plaintiffs that sued the company. Attorney General Formella objected to that plan because of inadequate contributions by the Sacklers and also because the Bankruptcy Court was forcing the objecting states to release the Sacklers from all civil liability. The Sacklers never filed for bankruptcy but were attempting to use the bankruptcy process to obtain for themselves non-consensual third-party releases from sovereign states that brought police power civil enforcement actions against them. In December 2021, the U.S. District Court vacated the Purdue bankruptcy order, agreeing that the Bankruptcy Court lacked authority to force states to release their claims against the Sackler family. This settlement is conditioned on approval by the Bankruptcy Court of the revised bankruptcy plan.

Under New Hampshire law, all funds received from this settlement will be used for opioid abatement purposes, with 85% of those funds being deposited into a dedicated opioid abatement trust fund. The remaining 15% will be distributed to those counties, cities and towns that brought their own opioid lawsuits prior to September 1, 2019.