30 September 2019
Purdue Pharma LP filed for bankruptcy on 15 September 2019 to short-circuit more than 2,000 lawsuits against Purdue and its owners, Sackler family. The settlement calls for the Sacklers to hand over Purdue to a trust controlled by the states, cities and counties that have sued to recoup billions of dollars they spent battling opioid addictions and overdoses. The company listed $10 billion in assets, including $1.2 billion in cash, and $1 billion in debts in its Chapter 11 filing. The Sacklers agreed to pay a minimum of $3 billion toward the settlement from the sale of their U.K.-based drug maker Mundipharma.
States that are not satisfied with Purdue’s offer will get a chance to voice their opposition before a bankruptcy judge approves the accord.
The plan requires Purdue to set up a trust for operating the company, which would generate money that governments could use to bolster drug treatment and policing budgets. That entity will be run by trustees appointed by the bankruptcy judge, and it will oversee pay-outs to state and local governments that sued.
The company in return will ask the bankruptcy judge to halt lawsuits brought by local and state governments that are not part of the current deal. A lawsuit filed by the state of Massachusetts says the family transferred more than $4bn from the company to personal accounts between 2008 and 2016. Oregon claims the family potentially took $10bn out of the company, the report said.
The New York attorney general’s office said on 13 September that it had tracked about $1 billion in wire transfers by the Sackler family, including through Swiss bank accounts, suggesting that the family tried to shield wealth as it faced a raft of litigation over its role in the opioid crisis.
Purdue Pharma owned by Sackler family is the manufacturer of OxyContin, an opioid medication used for treatment of moderate to severe pain. But being an opioid, it led to a common drug abuse. Patients who had become dependent on this drug experienced severe withdrawal symptoms.
In October 2017, The New Yorker published a story which highlighted the rise of addiction to oxycodone in the United States. Oxycodone is the generic name of OxyContin. The article blamed Sackler for the opioid epidemic in the United States.
Purdue Pharma is just one of the opioid companies being sued by more than 2,000 cities and counties for starting and sustaining the opioid crisis.
Purdue Pharma, and its owners, the Sackler family, are offering to settle more than 2,000 lawsuits against the company for $10 billion to $12 billion.
At a Cleveland meeting where at least 10 state attorneys general and the plaintiffs’ attorneys gathered, the company presented a plan for Purdue to declare Chapter 11 bankruptcy and then restructure into a for-profit “public benefit trust.” The trust will have more than $4 billion in drugs that would be provided to cities, counties and states, the people familiar with the matter said. Some of the drugs are used to rescue people from overdoses.
The attorneys general of 23 states rejected the settlement offer of US$12 billion by Purdue in September 2019. New York Times reported.
According to the Centres for Disease Control and Prevention opioid crisis claimed more than 400,000 lives from 1999 to 2017 in the United States. Why did the authorities not take any action until so much damage has been done.
Pharmaceutical companies have been ruthless in pursuing profits and Purdue is no exception. The Drug Administration, the health professionals, city state and municipal governments are also equally culpable for this opioid crisis. They should have seen the proliferation of the opioid use in pain management and should have stopped its wide usage at the very early stage.