OxyContin maker Purdue Pharma files for Chapter 11 bankruptcy, settles lawsuits
Sackler family would exit Purdue, pay $3 billion; the company would give more than $10 billion towards opioid overdose reversal medications.
Purdue Pharma, the maker of OxyContin, has filed for Chapter 11 bankruptcy in New York and is implementing a settlement agreement over numerous lawsuits brought against the opioid maker.
In the agreement and bankruptcy announced on Sunday, Purdue Pharma said it has reached an agreement in principle for settling the U.S. opioid litigation with 24 state attorneys general and officials from five U.S. territories.
Under the settlement, Purdue Pharma, under a reorganized company called NewCo, would give more than $10 billion to address the opioid crisis, including providing states and local communities, at no or low cost, tens of millions of doses of life-saving opioid overdose reversal medications such as nalmefene and naloxone.
Purdue has received FDA fast-track designation for nalmefene hydrochloride, a treatment that has the potential to reverse overdoses from powerful synthetic opioids such as fentanyl.
The Sackler family, owners of Purdue, would contribute a minimum of $3 billion, with the potential for substantial further monetary contributions from the sales of their ex-U.S. pharmaceutical businesses, the company said.
The deal on the table would see the Sacklers exit the company, according to The Wall Street Journal.
The settlement, which is subject to court approval, would have the Sackler family contributing all of the company's assets to a trust or other entity established for the benefit of claimants, with NewCo being governed by a board selected by the claimants and approved by the bankruptcy court.
NewCo would agree to marketing restrictions on the sale and promotion of opioids.
WHY THIS MATTERS
It is hoped that the settlement will dramatically increase access to life-saving opioid overdose reversal medications, one of the FDA's top public health priorities, the company said.
This court-supervised process would resolve all claims against Purdue, while preserving the value of the pharmaceutical company's assets for the benefit of those impacted by the opioid crisis.
THE LARGER IMPACT
The OxyContin maker has faced some 2,500 lawsuits brought by states, cities, counties, Native American tribes and others accusing the company of helping fuel widespread opioid addiction, according to the WSJ report.
The opioid epidemic has long been a challenging issue both for Americans and the healthcare system. The American Academy of Family Physicians published research this year showing that, if there's no change in the annual incidence of prescription opioid misuse, annual opioid deaths could hit 82,000 by 2025.
ON THE RECORD
"This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public," said Steve Miller, chairman of Purdue's Board of Directors. "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. We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible."
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
