Purdue Pharma Has Declared Bankruptcy — Is the Company Still in Business?

The gist:

• Purdue Pharma, the notorious pharmaceutical company known for its role in the opioid crisis, declared bankruptcy.
• The Sacklers, who own the company, agreed to pay $6 billion to settle the many lawsuits against them. The company will also cease to exist.
• When the bankruptcy deal takes effect, Purdue will be no longer and will become Knoa Pharma LLC, which will be owned by the National Opioid Abatement Trust.
• The Sacklers will have no stake in this new company, and profits from Knoa will go toward fighting the opioid endemic.

Few companies in the history of American capitalism have a worse reputation than Purdue Pharma. The company, which is widely known for making oxycontin and then encouraging doctors to prescribe it widely, even though they were allegedly aware that it was addictive, has been sued repeatedly for the role it played in the opioid epidemic.

More recently, Purdue Pharma had to declare bankruptcy as a result of the lawsuits, leading some to wonder whether the once giant pharmaceutical company is still in business.

When the company announced a plan for bankruptcy in 2022, part of the arrangement was that the company as a whole would cease to exist. The Sacklers, the family who owns the company and was crucial to its role as a distributor of oxycontin, agreed to pay a total of $6 billion to settle the many lawsuits across the country against both them and the company. Reporting suggested that the value of the deal could grow even more depending on what additional assets the Sacklers sell off.

The lawsuits against Purdue alleged that the company played a crucial role in spurring the opioid epidemic, which has killed at least 500,000 people in the U.S.

When the bankruptcy deal takes effect, Purdue will emerge as Knoa Pharma LLC and will be owned by the National Opioid Abatement Trust, an entity controlled by creditors of Purdue. The Sacklers have denied personal wrongdoing throughout this process.

Purdue Pharma filed for bankruptcy in 2019 amidst a slew of lawsuits that accused it of deceptively marketing OxyContin and fueling the opioid epidemic as a result. The company pleaded guilty to misbranding and fraud charges related to the marketing of OxyContin in both 2007 and 2020.

The money that the Sacklers have agreed to pay will go toward fighting the opioid epidemic.

The profits from the new LLC that will be formed out of Purdue Pharma will also go toward fighting the epidemic, and the Sacklers no longer own any stake in the company whatsoever. The settlement was approved in May of 2023, and it ensures that the Sacklers are now shielded from civil lawsuits related to their roles in Purdue Pharma, despite the fact that no one in the family filed for bankruptcy.

In spite of the money that the Sacklers were forced to pay related to the lawsuit, some have alleged that the family was aware that lawsuits would be coming after their money and have therefore hidden a lot of it in offshore accounts, out of the reach of the U.S. government. As a result, it's likely that the Sacklers will remain quite wealthy regardless of the damage they did through the epidemic.

Those who have followed the opioid epidemic know at least that the Sacklers are not the widely regarded family they once were. Even so, they may never face full accountability for the actions that they and Purdue Pharma took.