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Opioid Maker Purdue Files for Bankruptcy
Purdue Pharmaceuticals has filed Chapter 11 bankruptcy and agreed to pay between $10 billion and $12 billion to settle lawsuits over its role in the opioid crisis. Some of the governments suing Purdue have not signed off on the deal, however, so court fights are likely to continue.
The bankruptcy filing came days after the tentative agreement with a majority of states involved in litigation against the company. Under the settlement, which is subject to court approval, Purdue would contribute all its assets to a trust established for the benefit of the claimants. The new company will be governed by a board selected by the claimants and approved by the bankruptcy court. The new company will contribute “tens of millions of doses” of opioid overdose reversal medications and treatments aimed at opioid addiction at little or no cost, such as naloxone and nalmefene.
The settlement agreement was accepted in principle by 24 state attorneys general and a steering committee representing thousands of municipal governments. Steve Miller, chairman of the board of Purdue, said the settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation. Miller said the settlement would provide “billions of dollars and critical resources to communities across the country” who continue to cope with the opioid crisis.
The new company, which has not yet been named, will agree to be permanently bound to marketing restrictions regarding the sale and promotion of opioids. Purdue was known for aggressive marketing practices for its crown jewel, OxyContin.
Government entities that have not signed off on the deal have largely said they believe the company and its long-time owners, the Sackler family, will get off too lightly. In addition to 100% of Purdue’ assets, the Sackler families agreed to contribute a minimum of $3 billion, with the potential for substantial further monetary contributions from the sales of their former U.S. pharmaceutical businesses, such as Mundipharma, which has been pegged at a value of about $1.5 billion throughout the settlement discussions. The Sackler family issued its own statement supporting the settlement as “an historic step towards providing critical resources” to address the opioid crisis.
Source: BioSpace, September 16, 2019