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The Sackler family and the opioid maker they founded, Purdue Pharma, have agreed to pay $7.4bn to settle debts over their roles in the opioid crisis, ending months of negotiations after a previous deal fell apart .

This latest agreement, which still requires bankruptcy court approval, is $1.4bn more than the previous deal made between the parties. The new settlement was agreed between more than a dozen US states and other individuals who filed lawsuits against the company.

The drugmaker initially filed for bankruptcy in 2019 in a New York federal court to handle hundreds of lawsuits over its role in opioid crisis. As part of the deal, the Sackler family will pay $6.5bn over the next 15 years, while Purdue will pay $900mn.

“Families across New York and across the country are suffering tremendous pain and loss caused by the opioid crisis,” said New York attorney-general Letitia James, one of the officials who helped broker the of the deal, said on Thursday. “While no amount of money will fully repair the damage they’ve done, this massive influx of funds will bring resources to communities in need so we can heal.”

Purdue’s latest settlement is one of the largest potential payouts to come out of the US opioid crisis, which has led to more than 600,000 deaths since 1999, according to the Centers for Disease Control and Prevention.

A previous $6bn deal agreed between the Sackler family and creditors – which was largely negotiated during the pandemic – was struck down by the US Supreme Court last summer. The agreement relies on protecting family members from future lawsuits, which the high court said would not be allowed without family members filing for bankruptcy themselves.

The new deal is structured so that the Sacklers are not automatically protected from liability, but victims must agree not to pursue further legal action in order to receive compensation, according to a statement in New York attorney-general office.

The Supreme Court’s decision has left lawyers and companies scrambling to decide how to resolve so-called “mass torts,” where corporate product liability claims amount to thousands of victims and hundreds of thousands. millions or even billions of dollars.

Funds generated by the Sacklers and Purdue will be used over the next 15 years to fund opioid addiction treatment and recovery programs, the Texas attorney general’s office said.

Critically for many victims, members of the Sackler family will no longer be allowed to sell opioids in the US as part of the deal, and their ownership of Purdue has ended.

The Sackler family did not immediately respond to a request for comment.