Purdue Pharma files for bankruptcy as first step in $10B opioid settlement
It’s settled. Purdue Pharma has filed for bankruptcy as part of a deal that would see the OxyContin maker hand over $10 billion in cash and other contributions to mitigate the opioid crisis — without acknowledging any wrongdoing in the protracted epidemic that’s resulted in hundreds of thousands of deaths.
The announcement came two weeks after news of a proposed settlement surfaced and largely confirm what’s already been reported.
It also relieves Purdue from a multidistrict litigation that’s scheduled to go to trial on 21 October. According to the company, the co-lead counsel and the plaintiff’s executive committee in that case, as well as 24 state attorneys general and their counterparts from 5 US territories have signed off on the settlement.
Under the deal, Purdue execs have committed to providing opioid overdose reversal agents, such as naloxone and the experimental nalmefene hydrochloride, at no or low cost. The new company to be born out of Purdue’s ashes will also be “ bound permanently by injunctive relief, including marketing restrictions on the sale and promotion of opioids.”
The company will be owned by a trust tied to claimants and governed by a new board approved by the bankruptcy court.
In addition to giving up their shares, the Sackler families would also shell out $3 billion. The amount can go up after they sell other ex-US pharma businesses, including Mundipharma.
Whether the amount is enough to compensate for the damage opioids have ravaged in communities across the US will be up to debate. Purdue Pharma has reportedly made $35 billion in sales of the highly potent and addictive painkiller. In a deposition video obtained by ProPublica and STAT, Richard Sackler — who had first bought control of Purdue with his brothers Mortimer and Arthur, and was credited for spearheading an aggressive marketing campaign — said it would be “fair to say” his extended family has made over a billion dollars off the sale of OxyContin.
The New York state attorney general’s office has recently accused the family of trying to shield at least $1 billion in wealth, seemingly to avoid larger payouts.
For now, they seem eager to wash the controversy-ridden Purdue off their hands. From the Sackler family’s statement:
It is our hope the bankruptcy reorganization process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit. This process will also bring the thousands of claims into a single, efficient forum where the settlement can be finalized, reviewed by the bankruptcy court to ensure it is fair and just and then implemented.