California to Get $440 Million in Nationwide Opioid Settlement With Purdue Pharma

California will receive up to $440 million to fund addiction treatment and other services under a nationwide settlement agreement announced Monday with Purdue Pharma, the company responsible for inventing, manufacturing and marketing the highly addictive opioid OxyContin.

Attorneys general representing 49 states, the District of Columbia and U.S. territories agreed to the $7.4 billion settlement. Oklahoma, which reached its own settlement in 2019, is not included.

If the agreement is approved in federal bankruptcy court, members of the Sackler family who own Purdue Pharma will have to pay up to $6.5 billion, while the company itself is expected to pay up to $900 million. Payouts would occur over the next 15 years.

The settlement would also require the Sacklers to give up control of the company. The future of Purdue Pharma would be left up to a board of trustees selected by participating states and others who sued the company.

“The opioid epidemic has ravaged communities in California and across the country,” California Attorney General Rob Bonta said in a statement. “By holding Purdue Pharma and the Sackler family accountable for their role in fueling the opioid epidemic, we’re bringing much-needed funds for addiction treatment, prevention, and recovery to those impacted by this crisis.”

The agreement with Purdue Pharma and the Sackler family represents the nation’s largest settlement relating to the opioid crisis, and the money will be used to fund addiction treatment, recovery and prevention efforts across the country, according to Bonta’s statement.

Last year, the U.S. Supreme Court struck down a previous settlement deal involving Purdue Pharma because it protected members of the Sackler family from civil lawsuits over OxyContin even though the family did not file for bankruptcy. The new agreement would only protect the Sacklers from lawsuits brought forward by people who participate in the settlement; others would still be allowed to sue the family.

“Creditors can preserve their right to take legal action against the Sacklers if they do not opt in to the Sackler releases contained in the Plan,” Purdue Pharma said in a statement in March, when the company filed the deal in bankruptcy court.

Over the past several years, lawsuits against the company and others accused of facilitating the drug epidemic have been filed by local and state officials, Native American tribal governments and others. Settlements amounting to nearly $50 billion have already been announced.

California has already secured nearly $4 billion from companies that state officials say helped fuel the nation’s ongoing opioid crisis.

In May 2023, pharmacy giant Walgreens agreed to pay San Francisco nearly $230 million after it was accused of issuing thousands of suspect opioid prescriptions.

A few months before that, Walmart and CVS Pharmacy offered to pay the county up to $18.8 million after San Francisco joined nationwide lawsuits accusing the corporations of negligent prescription practices.

A court hearing for the Purdue Pharma settlement is scheduled for Wednesday, according to a statement issued by the company. If the court approves the disclosure statement, the terms of the settlement will be voted on by the company’s creditors.

“Today’s announcement of unanimous support among the states and territories is a critical milestone towards confirming a Plan of Reorganization that will provide billions of dollars to compensate victims, abate the opioid crisis, and deliver opioid use disorder and overdose rescue medicines that will save American lives,” the statement reads.

KQED’s Sydney Johnson contributed to this report.