OxyContin maker Purdue Pharma LP filed for bankruptcy protection in New York

News24xx.com -  OxyContin maker Purdue Pharma LP filed for bankruptcy protection in New York on Sunday night, succumbing to pressure from more than 2,000 lawsuits alleging the company helped heighten the deadly United States opioid epidemic.

Purdue's board met on Sunday evening to approve the long-expected bankruptcy filing, which the company is pursuing to restructure under terms of a proposal to settle the widespread litigation.

Purdue reached a tentative deal to resolve lawsuits with 24 states and five US territories, as well as lead lawyers for more than 2,000 cities, counties and other plaintiffs, the company said.

Two dozen states remain opposed or uncommitted to the proposed settlement, setting the stage for contentious legal battles over who bears responsibility for a public health crisis that has killed nearly 400,000 people between 1999 and 2017, according to the latest US data.

Thousands of cities and counties, along with nearly every state, have sued Purdue and, in some cases, its controlling Sackler family. The lawsuits, seeking billions of dollars in damages, claim the company and family aggressively marketed prescription painkillers while misleading doctors and patients about their addiction and overdose risks.

Purdue and the Sacklers have denied the allegations.

Opposing states, including Massachusetts, New York and Connecticut, want the Sacklers to guarantee more of their own money will go towards a settlement and have questioned Purdue's calculations valuing the overall deal at more than $10bn.

The Sacklers, who would cede control of Purdue in the proposed settlement, have offered $3bn in cash and an additional $1.5bn or more through the eventual sale of another company they own, called Mundipharma, according to the company and people familiar with the terms. The Sacklers have declined to revise their offer.

"This is the fork in the road. There are only two ways to go from here," said Purdue Chairman Steve Miller in an interview with the Reuters news agency.

Miller said Purdue plans to argue to opposing states that fighting the proposed settlement will likely result in protracted litigation, increasing legal fees and depleting value that could be steered to US communities reeling from opioid abuse. He described bankruptcy proceedings as the "best hope for finalizing and implementing a global resolution to this litigation."

In a statement, members of the Sackler family controlling Purdue said they hoped those opposing the current settlement offer would eventually change their minds. "It is our hope the bankruptcy reorganization process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit," the family said.

The outcome of Purdue's attempted bankruptcy reorganisation and settlement negotiations will help determine how much money US communities receive from the company and the Sacklers to address harm from opioids. A reorganisation and settlement would ultimately need to be approved by a US bankruptcy judge.

States suing the Sacklers, including several over the past week, allege the family improperly reaped billions of dollars from opioid sales despite knowledge of their harmful effects. The Sacklers, some of whom previously served on Purdue's board and are well-known wealthy philanthropists, have denied the allegations.

Purdue's proposed settlement envisions it becoming a trust that would contribute tens of millions of doses of drugs that the company developed to combat opioid overdoses and addiction to US communities, at little or no cost, the company said.

Purdue values the drugs at $4.45bn over 10 years, the people familiar with the matter said. Under the proposal's terms, the restructured Purdue would be permanently bound by so-called injunctive relief, which includes restrictions on the promotion and sale of opioids.

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

 

 

 

NEWS24XX.COM/PAR