Opioid epidemic: Purdue Pharma files for bankruptcy

Elias Hubbard
September 16, 2019

Purdue Pharma, the maker of OxyContin, filed for Chapter 11 bankruptcy protection Sunday night, just days after striking a settlement with more than 2,000 local governments over its alleged role in creating and sustaining the deadly opioid crisis.

After bankruptcy filings are complete the company estimates it will provide more than $10 billion in funding to address the opioid crisis which will include settlements with 24 state attorneys general, officials from five USA territories and the multi-district litigation, the statement said.

Those states have opposed a draft agreement reached on Wednesday between the Sacklers and Purdue Pharma and the almost two dozen states and thousands of local governments that are challenging them in court.

Following Sunday's bankruptcy filing, the company's board members said the deal struck with the thousands of state and local governments that sued will provide billions to combat the country's opioid crisis.

Numerous plaintiffs accused the company of making huge profits from selling the painkiller, first introduced in 1996, while downplaying its addictive qualities, thus fueling the USA opioid crisis, which has seen over 200,000 people dying as result of overdoses with prescription drugs from 1999 to 2017. "We will continue to work with state attorneys general and other plaintiff representatives to finalise and implement this agreement as quickly as possible".

Forbes estimates the wealth of the Sackler family at $13 billion, but many U.S. states, including New York, Massachusetts, Connecticut, Pennsylvania and North Carolina, claim their fortune is greater and hidden overseas. "It is our hope the bankruptcy reorganisation process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit", the family said.

Purdue Pharma, accused of fostering the USA opioid crisis with its drug OxyContin, filed for bankruptcy protection in a NY court, after a tentative settlement deal faced opposition from multiple states. "The alternative is to not settle but instead to resume the litigation", he said on a conference call with reporters.

"The resumption of litigation would rapidly diminish all the resources of the company and would be lose-lose-lose all the way around", he said in the statement.

States opposing the settlement offer have vowed to fight attempts by Purdue and the Sacklers to use bankruptcy proceedings to contain the litigation.

Last Friday, New York Attorney General Letitia James said she uncovered roughly US$1 billion in wire transfers "between the Sacklers, entities they control and different financial institutions, including those that have funnelled funds into Swiss bank accounts".

Key issues that could be decided include whether the suits against the Sacklers in state courts will be able to move ahead, and what will happen to the company itself. Another option could be for a judge to order it be sold.

Other reports by Click Lancashire

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