Court OKs Purdue Pharma’s Bankruptcy Plan Resolving Opioid Litigation
A federal bankruptcy court has approved a reorganization plan by Purdue Pharma, manufacturer of the opioid, Oxycontin (oxycodone), under which the company will be dissolved to form a new company focused on opioid abatement and the company’s owners, members of the Sackler family, will be required to pay $4.3 billion over nine years to states, municipalities and private plaintiffs to settle opioid litigation.
The court’s approval puts into motion a restructuring plan for the company in which all of Purdue’s operating assets will be transferred to a new public benefit company that would fund trusts dedicated to abating the opioid crisis, develop and distribute medicines to reverse opioid overdoses and treat opioid addiction, and otherwise take into account long-term public health interests relating to the opioid crisis.The settlement also includes a prohibition restricting the promotion of opioid products by the company.
The new company will oversee the ongoing development and eventual distribution of three opioid addiction treatment and overdose reversal medicines: buprenorphine naloxone tablets; over-the-counter naloxone nasal spray; and injectable nalmefene. The new company will be owned mostly by the National Opioid Abatement Trust, a recently formed entity created to satisfy the claims of state and local governments, and the Tribe Trust, a group of Indian tribes and tribal organizations.
Purdue Pharma says the Sackler family currently has no role in Purdue and will have no involvement in the new company and will end their involvement in pharmaceutical companies globally. Under the settlement, the Sackler family has agreed to pay $4.325 billion, in addition to the $225 million previously paid to the US to resolve civil claims.
Connecticut Attorney General William Tong joined eight other state attorneys general filing objections with the US Bankruptcy Court for the Southern District of New York over the settlement with plans to file a notice of appeal.