Purdue Planning Sudden Bankruptcy?
News Update: Drugmaker has Filed for Chapter 11 Bankruptcy Protection in a New York Court
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Oxycontin manufacturer Purdue Pharma has filed for bankruptcy. (c) Africa Studio
Under fire for its allegedly irresponsible approach to opioid marketing, Oxycontin manufacturer Purdue Pharma is preparing to declare bankruptcy as per the end of September.
The news comes after several states were said to be unhappy about a proposal to pay as much as $12 billion to resolve the mounting number of lawsuits – especially as Forbes magazine in 2016 calculated the net worth of the founding Sackler family at around $14 billion. Parts of the family are also said to have balked at giving up a large chunk of their personal wealth to settle the claims.
Last week, news agencies leaked details of a planned deal in which the Sacklers would pay $3 billion, in addition to $1.5 billion following the sale of another company, and transform Purdue into a “public benefit trust corporation.”
All profits from drug sales and other proceeds subsequently would go to the plaintiffs suing the drugmaker for causing or contributing to their addiction. Additionally, Purdue would provide more than $4 billion in free drugs, including overdose-reversal medicines.
Connecticut’s attorney general, William Tong, in a statement quoted by the local press, has called for the company to be "broken up and shut down," with its assets liquidated. Other states calculate they would be better off settling immediately, before the drugmaker declares bankruptcy.
According to Reuters, the judge overseeing the federal level talks wants 35 states to get on board, but not enough have signed up yet. A bellwether trial in Ohio next month will test the robustness of the claims against Purdue and other opioid makers.
Against this backdrop, the number of lawsuits filed against US opioid makers continues to rise. Johnson & Johnson has been ordered to pay $572 million to the state of Oklahoma after losing a court case. Additionally, Teva, Allergan and Endo have settled some claims out of court. Purdue also has made payments, but these are considered by the plaintiffs to be far from adequate.
