Pur­due Phar­ma pro­pos­es $12B set­tle­ment to clean up opi­oid mess — re­port

Af­ter months of ne­go­ti­a­tions with states and fed­er­al plain­tiffs ac­cus­ing it of in­sti­gat­ing the opi­oid cri­sis through ag­gres­sive and de­cep­tive mar­ket­ing tac­tics, Pur­due Phar­ma is ready to pay $10 to $12 bil­lion to set­tle it all.

Dan Pol­ster Fed­er­al Bar As­so­ci­a­tion

The po­ten­tial deal would cov­er hun­dreds of law­suits be­ing waged against the com­pa­ny by states, cities, towns and tribes, which is be­ing over­seen by Unit­ed States dis­trict judge Dan Pol­ster in Cleve­land, along­side cas­es in­volv­ing oth­er pre­scrip­tion opi­oid mak­ers. As part of the deal, the Sack­ler fam­i­ly — who had been charged with build­ing a “multi­bil­lion-dol­lar drug em­pire based on ad­dic­tion” — will give up own­er­ship in Pur­due.

The ma­jor­i­ty of the set­tle­ment will come in the form of in-kind drug do­na­tions and prof­its, with the ex­cep­tion of a $3 bil­lion cash pay­ment from the Sack­ler fam­i­ly ($4.5 bil­lion if they man­age to sell Mundiphar­ma, an­oth­er drug com­pa­ny they own, for more). Pur­due has re­port­ed­ly pledged to pro­vide more than $4 bil­lion in drugs, in­clud­ing mar­ket­ed and ex­per­i­men­tal treat­ments for opi­oid ad­dic­tion and over­dose re­ver­sals, to the pub­lic for free. Un­der a new pub­lic ben­e­fit trust struc­ture, all sales of its oth­er drugs — in­clud­ing Oxy­Con­tin, the opi­oid at the cen­ter of its mis­deeds — would al­so go to the plain­tiffs.

If the set­tle­ment is reached, Pur­due will set a re­struc­tur­ing plan in­to mo­tion by first de­clar­ing Chap­ter 11 bank­rupt­cy, then tran­si­tion in­to a trust made of court-ap­point­ed trustees, who will then se­lect a board of di­rec­tors to run the day-to-day op­er­a­tions.

“While Pur­due Phar­ma is pre­pared to de­fend it­self vig­or­ous­ly in the opi­oid lit­i­ga­tion, the com­pa­ny has made clear that it sees lit­tle good com­ing from years of waste­ful lit­i­ga­tion and ap­peals,” the com­pa­ny said in a state­ment to NBC News, which first re­port­ed the deal.

Pur­due Phar­ma — which has re­port­ed­ly made more than $35 bil­lion in Oxy­Con­tin sales — and the Sack­ler fam­i­ly have pre­vi­ous­ly de­nied the le­gal al­le­ga­tions against them.

It’s un­clear whether, or how many, plain­tiffs are on board with the pro­posed terms of the deal. Pur­due is fram­ing it as a take it or leave it deal, since they plan to file for bank­rupt­cy no mat­ter the out­come and the re­sult­ing amount that could go in­to a set­tle­ment would be low­er than cur­rent­ly of­fered, ac­cord­ing to NBC.

An­drew Pol­lis Case West­ern Re­serve

“(The deal is) very sig­nif­i­cant. Nev­er be­fore have we ever seen a mem­ber of a pri­vate in­dus­try of­fer so much mon­ey to try to deal with a pub­lic health cri­sis of this mag­ni­tude,” An­drew Pol­lis, a law pro­fes­sor at Case West­ern Re­serve Uni­ver­si­ty, told NBC.

Opi­oid-re­lat­ed over­dos­es have claimed al­most 400,000 lives from 1999 to 2017, ac­cord­ing to the CDC. Gov­ern­ment at­tor­neys have brought over 2,000 law­suits against opi­oid man­u­fac­tur­ers and dis­trib­u­tors, both seek­ing dam­ages and at­tempt­ing to hold ex­ec­u­tives be­hind the de­ci­sions to boost opi­oid sales at all costs ac­count­able.

In May, ex­ec­u­tives at In­sys — which mar­kets a po­tent fen­tanyl spray — were found guilty of en­gag­ing in a bribery scheme to get doc­tors to pre­scribe their drug, Sub­sys. The com­pa­ny had pre­vi­ous­ly agreed to pay $225 mil­lion to set­tle fed­er­al lit­i­ga­tions, but are still in set­tle­ment talks with states af­ter de­clar­ing bank­rupt­cy. And on Mon­day glob­al phar­ma con­glom­er­ate J&J was found guilty and fined $572 mil­lion in an Ok­la­homa court for its role in the opi­oid epi­dem­ic there.

The par­ties have un­til Fri­day to re­port back to Pol­ster on the deal, the dis­trict judge who had en­cour­aged the set­tle­ment talks, the Wash­ing­ton Post not­ed.

Scott Gottlieb, AP Images

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