OxyContin Maker Purdue Pharma Files For Bankruptcy Protection

(RTTNews) - OxyContin maker Purdue Pharma L.P., which is accused of fueling the ongoing opioid epidemic in the United States, has filed for Chapter 11 Bankruptcy protection after reaching deals to settle thousands of opioid lawsuits.

In a statement, the company said it reached an agreement to settle the U.S. opioid litigation. The agreement is with 24 state attorneys general, analogous officials from 5 U.S. territories, the Plaintiffs' Executive Committee in the multi-district litigation or MDL, and co-lead counsel in the MDL.

The settlement structure would provide more than $10 billion to address the opioid crisis. The company has also agreed to contribute millions of doses of life-saving opioid overdose reversal medications.

Purdue's popular prescription painkiller OxyContin, which was launched in the 1990s, was alleged to have triggered the opioid addiction that grew to an alarming rate in the U.S. It is estimated that more than 300,000 Americans have died of an opioid overdose since 2000, while around 11.4 million people have misused prescription opioids.

Various state and local governments have filed more than 2,000 lawsuits against major drug makers, alleging them to have aggressively marketed the painkillers despite knowing the risk of addiction.

In March, Purdue Pharma had settled a lawsuit filed by the state of Oklahoma for $270 million. Meanwhile, healthcare giant Johnson & Johnson, which is being called as the "Kingpin" behind the crisis, was ordered to pay $572 million, much less than the $17 billion sought by Oklahoma.

Under the latest settlement agreement, which is subject to court approval, Purdue's owners, the Sackler families, would contribute all of Purdue's assets to a new company. The new company could provide life-saving opioid overdose reversal medications such as nalmefene and naloxone to states and local communities, at no or low cost.

There will also be marketing restrictions on the sale and promotion of opioids. Further, the Sackler families agreed to contribute a minimum of $3 billion, with the potential for further monetary contributions from the sales of their ex-U.S. pharmaceutical businesses. In order to finalize and implement the settlement agreement, Purdue filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Purdue Chairman Steve Miller said, "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."