Purdue Pharma will pay $8.3 billion and plead guilty to three felonies to settle federal charges related to how it marketed its addictive painkiller OxyContin, which has been partly blamed for accelerating the opioid crisis.
The company's owners, the Sackler family, will pay $225 million in a separate civil settlement with the U.S., court papers and U.S. officials said, according to Bloomberg and The Wall Street Journal.
In the main settlement Purdue will pay $225 million since it doesn't have the assets to cover the whole figure, The Journal reported. The federal government will cede most of the rest of the penalty to provide more money to states, counties and North American tribes, the paper reported.
Purdue Pharma still faces thousands of civil claims by local and state officials over the overprescription of Oxycontin, which many have linked to the opioid crisis.
Estimates tie more than 200,000 U.S. deaths to opioid addiction.
Last year, the claims led Purdue to file for Chapter 11 bankruptcy protection. Wednesday's settlement requires the approval of U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y.
In bankruptcy court, Purdue proposed a $10 billion settlement fund, with the Sackler family itself contributing $3 billion.
Last month, drugmaker Mallinckrodt (MNK) - Get Report became the third major opioid producer to file for bankruptcy, weighed down by thousands of U.S. lawsuits from states, cities and counties.
"After many months of deliberation, negotiation and consideration of alternatives, Mallinckrodt's management and board of directors determined that implementing a Chapter 11 restructuring provides the best opportunity to maximize the value of the enterprise and position the company for the future in light of the current challenges it faces," said Mark Trudeau, Mallinckrodt's president and CEO, in a statement.