Purdue Files for Bankruptcy
Purdue Pharma, the drugmaker under fire for triggering an opioid crisis in the US, has filed for Chapter 11 bankruptcy protection in a New York court after reaching a tentative agreement with both state and local governments that is worth up to $12 billion.
The maker of OxyContin has reached a deal with 24 states and five US territories, although another 24 states are said to remain opposed to the proposed settlement.
Under the terms of the agreement, Purdue is to be dissolved and the monies raised, estimated at $10 billion to $12 billion, will be used toward settling the lawsuits. The Sackler family, owners of the pharma group, will also personally contribute $3 billion, which will be paid out over seven years. An additional $1.5 billion is anticipated from the eventual sale of Mundipharma, another company the Sacklers own.
Purdue’s proposal is that it would emerge as a trust that would contribute at no or low cost tens of millions of drug doses developed to reverse or treat opioid overdoses and addiction.
“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” said Seve Miller, chairman of Purdue’s board of directors. “We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible.”
Media reports say states including Massachusetts, New York and Connecticut want the Sacklers to guarantee more of their own money will go toward a settlement, also questioning how Purdue came up with the contribution figure.
New York state prosecutors have also accused the Sacklers of moving billions of dollars offshore, including to accounts in Switzerland. According to New York Attorney General Letitia James, the family has made about $1 billion in transfers among themselves and their shell companies while they were “draining Purdue of its opioids proceeds”. However, a family spokesman said the “decade-old” transfers were perfectly legal and appropriate.
Lawsuits allege that Purdue and the Sacklers have fuelled the opioid crisis by using deceptive practices to sell the drugs and downplaying their addictive qualities. Purdue has denied the allegations, arguing that the US Food and Drug Administration had approved labels for OxyContin warning about the risks.
