Purdue Pharma
Two guilty pleas, the opioid crisis and a $7.4 billion exit
No drugmaker is more closely identified with a public health disaster than Purdue Pharma, the privately held maker of OxyContin. Purdue pleaded guilty to federal crimes twice, in 2007 and 2020, filed for bankruptcy in 2019, and in 2025 won approval for a plan that dissolves the company and requires its owners, members of the Sackler family, to contribute up to $7 billion. This article traces the company's path from OxyContin's launch to its dissolution.
Questions
Why is Purdue Pharma so controversial?
Two criminal guilty pleas, 900,000 deaths linked to the opioid crisis and a landmark Supreme Court ruling make Purdue the most judicially scrutinised drugmaker in US history.
Purdue is widely regarded as a central actor in the US opioid epidemic. Its opioid painkiller OxyContin became a best-seller from the late 1990s, and lawsuits from states, cities, tribes, hospitals and individuals alleged that Purdue aggressively and deceptively marketed the drug and downplayed its addiction risk. The opioid crisis has been linked to 900,000 US deaths since 1999.
Q2What did Purdue admit to in 2007?
A felony misbranding plea and $634.5 million in combined fines — roughly 90% of OxyContin profits during the offence period — yet none of the three executives who also pleaded went to prison.
In May 2007, The Purdue Frederick Company and three senior executives pleaded guilty to misbranding OxyContin. Under the plea, Purdue and the three executives paid a combined $634,515,475. The company admitted it had fraudulently marketed OxyContin by falsely claiming it was less addictive, less subject to abuse and less likely to cause withdrawal than other pain medications, with no medical research to support those claims.
Q3What did Purdue plead guilty to in 2020?
Three federal felonies: defrauding the DEA by misleading regulators about overprescribing efforts, paying kickbacks to doctors through an electronic health records company, and impeding the fight against the addiction crisis.
In October 2020 Purdue agreed to plead guilty to three federal felonies. According to NBC News, the counts covered defrauding the United States by misleading regulators about its efforts to curb overprescribing, and violating anti-kickback law by paying doctors to write more OxyContin prescriptions. Prosecutors also described a scheme in which Purdue paid electronic health record company Practice Fusion to create software alerts that nudged doctors toward prescribing opioids when not medically necessary.
Q4Why did critics say the $8.3 billion 2020 settlement was hollow?
The headline was far larger than what prosecutors expected to collect, the Sacklers paid $225 million without admitting wrongdoing, and no individual was criminally charged — while Purdue had reportedly earned more than $30 billion from OxyContin.
The headline figure was far larger than what the government expected to collect. Purdue agreed to a $3.54 billion criminal fine, a $2 billion criminal forfeiture and a $2.8 billion civil penalty, but prosecutors agreed to accept $225 million toward the forfeiture if Purdue reorganised into a public benefit company, and the fine and civil penalty were likely to receive cents on the dollar in bankruptcy.
Q5How much money did the Sackler family take out of Purdue?
More than $10 billion between 2008 and 2016, according to legal analysis of the bankruptcy — distributions made while litigation mounted and the company's ability to pay creditors eroded.
According to a legal analysis of the bankruptcy, between 2008 and 2016, while OxyContin was being marketed, Purdue distributed more than $10 billion to or for the benefit of the Sacklers. These withdrawals became a central grievance for creditors, who argued the family had moved wealth out of the company as litigation mounted, leaving Purdue less able to pay. The family disputed the claims.
Q6What did the Supreme Court decide in the Purdue case?
In Harrington v. Purdue Pharma (2024), the court held that the Bankruptcy Code does not permit non-consensual releases of claims against people who have not themselves declared bankruptcy — a ruling with consequences well beyond Purdue.
In June 2024, in Harrington v. Purdue Pharma, the Supreme Court held that the Bankruptcy Code does not authorise non-consensual releases of claims against non-debtors, meaning the Sacklers could not be shielded from lawsuits by people who had not agreed to release them. As PBS reported, the court rejected the earlier plan because it gave the family protection even though they had not declared bankruptcy personally.
Q7What does the final 2025 settlement do?
Sackler family members contribute up to $7 billion over 15 years; individual victims receive roughly $8,000–$16,000; the family is banned from opioid businesses and cannot attach its name to institutions in exchange for donations.
A federal bankruptcy judge formally approved the plan in November 2025. It requires Sackler family members to contribute up to $7 billion over 15 years, within a total package of $7.4 billion to creditors. Most funds go to governments for opioid abatement, while about $850 million is set aside for individual victims, including more than $100 million for children born with opioid withdrawal.
Q8Does Purdue Pharma still exist?
No — the plan dissolved the company and transferred its assets to Knoa Pharma, an independent foundation focused on opioid treatment and overdose reversal, with no Sackler involvement.
No. The plan dissolved Purdue and transferred its assets to a new company, Knoa Pharma, owned by an independent foundation and focused on supplying opioid use disorder treatments and overdose-reversal medicines with no obligation to maximise profits. The Sacklers have no interest or role in it, and it operates under a strict injunction overseen by a monitor. The plan went into effect on May 1, 2026.
Q9What role did McKinsey play in Purdue's OxyContin sales?
McKinsey helped turbocharge OxyContin sales and later paid $573 million to states — then a further $650 million to the Justice Department — in one of the largest consulting-firm enforcement actions in US history.
The consulting firm McKinsey & Company advised Purdue for years. Massachusetts' attorney general said McKinsey helped Purdue focus on higher, more lucrative dosages, increase visits to high-volume prescribers, encourage opioid makers to band together to defend against strict FDA treatment, and use mail-order pharmacies to get around retail restrictions on suspicious high-dose prescriptions. It also designed a plan to "turbocharge" OxyContin sales at the height of the epidemic, and when litigation began, McKinsey partners allegedly discussed deleting documents.
Q10How does Purdue's settlement compare with other opioid manufacturers?
Purdue's two criminal pleas, its direct link to OxyContin and the Supreme Court ruling its bankruptcy produced distinguish it from Teva ($4.25bn), CVS ($5bn) and Walgreens ($5.7bn), whose settlements contained no criminal admissions.
Purdue is the most prominent opioid maker to be held to account, but not the only one. Teva, which sold branded fentanyl products and generic opioids, agreed to a nationwide settlement of up to $4.25 billion over 13 years, including up to $1.2 billion of its generic Narcan, without admitting wrongdoing. Mallinckrodt, the largest US generic opioid manufacturer, agreed to pay $1.6 billion into a trust, a figure later reduced through a second bankruptcy. Pharmacy chains also settled, including CVS for $5 billion and Walgreens for $5.7 billion.
Q11Why do critics still regard the outcome as unsatisfying?
Victim payouts are small relative to the harm described, the Sacklers keep most of their fortune paid over 15 years, and no family member was criminally charged — while supporters argue the settlement funds billions in opioid treatment.
The main criticisms are about proportionality and accountability. Victims' payouts are small relative to the harm described; the individual awards were described as a frustration for victims. The Sacklers keep most of their fortune and pay over 15 years. No Sackler family member was criminally charged, and the 2020 plea agreement expressly did not release individuals from potential criminal liability, but none followed.