Purdue Pharma’s $5.5 Billion Criminal Plea Deal Approved by Judge

A New Jersey federal judge accepted Purdue Pharma LP’s multibillion-dollar criminal plea deal with the US government on charges related to its dissemination of addictive opioid products, a critical step for the OxyContin maker’s $7.4 billion bankruptcy plan.

Judge Madeline Cox Arleo of the US District Court for the District of New Jersey on Tuesday apologized to opioid addiction victims and their family members as she accepted Purdue’s 2020 guilty plea for misleading federal regulators about its efforts to prevent drug diversion and paying illegal kickbacks to prescribing doctors.

“It is the best choice that I have and I am satisfied it is the best choice at this juncture,” she said. “I wish there was more I was empowered to do.”

The agreement with the Department of Justice allows Purdue to consummate its Chapter 11 bankruptcy plan, largely structured around a deal with the company’s Sackler family owners to pay at least $6.5 billion to compensate personal injury victims and fund opioid abatement efforts by local governments across the country.

The sentencing hearing was put on hold for several years as Purdue’s bankruptcy was prolonged by appeals over provisions releasing the Sacklers from legal liabilities related to the company’s production and sale of addictive opioids.

A revised version of the plan, approved by a New York bankruptcy judge in November, gives creditors the ability to opt out of releasing claims against Sackler family members in exchange for a smaller settlement distribution.

Some two dozen individuals spoke during the proceedings Tuesday to recount how their lives were upended over the last three decades from personal opioid addiction or loss of family members to drug overdose, caused primarily by excessive and unchecked writing of OxyContin prescriptions.

Urging the court to reject the plea agreement, several of the speakers said the deal fails to adequately hold those most responsible to account for the company’s marketing practices and failures to warn about the dangers of its prescribed painkillers.

“Justice is the court rejecting the plea,” said Michele Wagner, whose son died of an overdose the night before Thanksgiving in 2014. “A fine is not justice for the scale of harm caused.”

Under the criminal plea deal—the largest penalty ever levied against a pharmaceutical manufacturer—Purdue has been assessed a $3.54 billion criminal fine and an additional $2 billion criminal forfeiture.

The company also agreed to a civil settlement that provided the US government with a $2.8 billion bankruptcy claim, resolving allegations that it allowed false claims to be submitted to federal healthcare programs.

The federal government has agreed to receive a partial payment of $225 million for the criminal forfeiture and credit the remainder to payment of other claims in the bankruptcy case.

Arleo, who postponed the sentencing hearing by a week to accommodate hours of personal impact statements, said Tuesday she was moved by the victims’ testimony, but limited in her ability to provide greater relief since the government and the company agreed to a fine and restitution for “reckless and indefensible” behavior.

“To each victim and their families, I apologize,” she said. “The victims in this case did not choose addiction.”

Purdue’s plan, which provides $865 million in direct payments to personal injury claimants, is slated to take effect by the end of the week.

The case is USA v. Purdue Pharma LP, D.N.J., No. 20-01028, hearing 4/28/26.