Bankrupt Purdue Pharma Cleared to Sell Consumer Unit
Privately held US drugmaker Purdue Pharma has received permission from a US bankruptcy court to sell its consumer health business, Avrio Health, for $397 million to a subsidiary of Arcadia Consumer Healthcare.
With the New York court’s decision, Purdue can begin liquidating its assets while awaiting a final ruling on a $10 billion settlement that calls for the company's remaining assets to be dedicated to fighting the US opioid epidemic, in which its drug OxyContin is seen as playing a major role.
Purdue's creditors' committee has urged the company to use the proceeds from the sale to begin compensating opioid victims and funding addiction treatment programs. A Purdue attorney told the court, however, that the drugmaker first needs to “build consensus” among various stakeholders in its bankruptcy proceedings while the liquidation locked up in appeals.
The controversial bankruptcy plan agreed in 2019 shields Purdue’s wealthy owners, the Sackler family, from prosecution, thwarting efforts to make it completely liable for damages in the deaths of more than 500,000 people in the US estimated to have died from opioid overdoses over a 20-year period.
In spring 2022, Purdue settled with the attorneys general of eight states and the District of Columbia (Washington, DC), committing to pay up to $6 billion in cash to resolve widespread litigation, the Reuters news agency reported at the time. The states previously had rejected a settlement that included a $4.3 billion cash payment.
Up to now, the US Department of Justice has been a holdout in the proceedings, continuing to argue that Sackler family members can’t be legally protected by the bankruptcy settlement because they themselves are not bankrupt.
An appeals court that heard the case last year could have the last word on this question.
Author: Dede Williams, Freelance Journalist
