Purdue Pharma in $10-Billion-Plus Opioid Settlement; Files for BankruptcyBy
Purdue Pharma has reached an agreement of more than $10 billion for settling opioid litigation. The agreement covers litigation facing the company with 24 state attorneys general, analogous officials from five US territories, and plaintiffs’ executive committee and co-lead counsel in multidistrict litigation. To finalize and implement the settlement agreement, Purdue has filed for reorganization under Chapter 11 of the US Bankruptcy Code.
The settlement structure is estimated to provide more than $10 billion of value to address the opioid crisis. Under the agreement, the owners of Purdue are to contribute all assets to a trust or other entity established for the benefit of claimants. The new company (NewCo) is to be governed by a new board selected by claimants and approved by the bankruptcy court. NewCo is potentially contributing tens of millions of doses of opioid overdose reversal and addiction treatment medications (eg. nalmefene and naloxone) at no or low cost. NewCo is also agreeing to be bound permanently by injunctive relief, including marketing restrictions on the sale and promotion of opioids. In addition to 100% of Purdue, the Sackler families, the owners of Purdue, are to contribute a minimum of $3 billion, with the potential for substantial further monetary contributions from the sales of their ex-US pharmaceutical business.
“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,” said Steve Miller, Chairman of Purdue’s Board of Directors in a September 15, 2019 company statement. “We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible.”
Purdue has received US Food and Drug Administration fast-track designation for nalmefene hydrochloride, a treatment that has the potential to reverse overdoses from synthetic opioids such as fentanyl. Purdue says NewCo could also continue supporting the development of an over-the-counter nasal naloxone product and provide millions of doses at no or low cost to communities around the country.
The court-supervised filing process, with a hearing that was scheduled for September 17, 2019, is intended to facilitate an orderly and equitable resolution of all claims against Purdue while preserving the value of Perdue’s assets for the benefit of those impacted by the opioid crisis. Purdue Pharma filed a voluntary petition of relief along with 23 affiliated debtors.
Source: Purdue Pharma