Pharmaceutical giant Purdue Pharma has filed for Chapter 11 bankruptcy as part of a tentative agreement to settle thousands of lawsuits over its role in the opioid crisis.
The company responsible for OxyContin announced Sunday it filed for bankruptcy protections just days after agreeing to terms with state attorneys general in over 2,000 lawsuits that claim Purdue’s blockbuster drug was behind the epidemic of opioid addiction.
Purdue announced the deal with 24 attorneys general and five U.S. territories would equate to over $ 10 billion to help states recover from a flood of opioids since the 1990s. The company to replace Purdue, once the Sackler family gives up $ 3 billion and all stakes, will be called NewCo. A board of directors approved by the bankruptcy court will oversee the company’s transition to a public trust, as well as sales of opioids and overdose reversal drugs.
“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. “We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible.”
To fund a public trust, which will maintain funds to aid states in addiction recovery efforts, NewCo will continue selling opioids manufactured by Purdue, as well as an overdose reversal drug, nalmefene hydrochloride, that has been fast-tracked for FDA approval.