Purdue Pharma, maker of OxyContin, files for bankruptcy
- Purdue Pharma is facing thousands of lawsuits that allege the decades-old drug company misleadingly marketed the opioid OxyContin.
- On Sunday, Purdue filed for bankruptcy after reaching a tentative settlement deal with some of the parties suing the company.
- The deal, which some plaintiffs have already rejected, calls for a potential payout of up to $12 billion and for the company to restructure itself.
Purdue Pharma LP — the company that makes the controversial painkiller OxyContin — has filed for bankruptcy protection, a move that temporarily halts thousands of lawsuits against the drug company from more than 2,600 cities, counties, and other parties. Those plaintiffs have accused Purdue of misleadingly marketing OxyContin as it fueled the American opioid crisis, which has killed more than 400,000 people over the past two decades.
Days before the bankruptcy filing, Purdue reached a tentative settlement deal with some of the parties suing the company. That deal could pay out up to $10 to $12 billion over the following years, and it also calls for Purdue to restructure itself into something called a public benefit trust, in which profits earned from OxyContin and other drugs would go toward plaintiffs’ claims and the development of medicines to fight drug addiction.
“This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public,” Steve Miller, chairman of Purdue’s board of directors, said in a statement. “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.”
The deal also requires the Sackler family, Purdue’s owners and one of the wealthiest families in the U.S., to pay plaintiffs $3 billion over seven years and to give up control of the company. Twenty-four states and some 2,000 local governments have agreed to the deal so far.
But other states, including New York, Massachusetts, and Washington, D.C., have rejected the deal, arguing that Purdue is unjustly avoiding liability and that the settlement won’t actually pay out $12 billion over time.
In an op-ed for The Washington Post, Maura Healey, attorney general of Massachusetts, echoed these reasons for rejecting the deal, which she characterized as a “ploy that’s offensive to families who have lost loved ones to this epidemic.”
“I rejected the settlement because it doesn’t tell the truth about what happened,” she wrote. “Families deserve to know what Purdue and its executives and directors knew, and what they did. The evidence — their emails, business plans, board minutes, all of it — should be put on the Internet for all to see. Purdue and the Sacklers have fought for years to keep the facts secret. Under their proposal, the story could stay hidden forever.
I also turned down their proposal because neither the company nor its leadership admit they did anything wrong. That’s not accountability.”
Miller suggested there’s no alternative, and said the company doesn’t plan to admit wrongdoing.
“The alternative is to not settle but instead to resume the litigation,” he said on a 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. Whatever people might wish for is not on the table now.”
But Healey and others suggest there is something on the table: the Sackler family’s personal wealth.
“Purdue’s bankruptcy filing is the company’s latest tactic to protect the Sackler fortune,” she wrote in her op-ed. “It won’t work. Our case against the company and the Sacklers will end, but not this week and not on their terms. We started this fight, and we will end it with accountability and justice.”