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Purdue Pharma Files for Chapter 11 Bankruptcy as Part of Opioid Settlement

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Purdue Pharma has filed for Chapter 11 bankruptcy. The firm that earned billions of dollars marketing the prescription painkiller OxyContin has already signed onto a tentative settlement – potentially worth $12 billion — with a host of state and local governments that are suing it over the damage done by opioids. Photo Credit: Shutterstock

By: Mike Mustiglione

Purdue Pharma has filed for Chapter 11 bankruptcy.

The firm that earned billions of dollars marketing the prescription painkiller OxyContin has already signed onto a tentative settlement – potentially worth $12 billion — with a host of state and local governments that are suing it over the damage done by opioids.

“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation,” Steve Miller, chairman of Purdue’s board of directors, said in a statement, “and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis. We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible.”

The Sackler family, which owns the company, expressed “deep compassion for the victims of the opioid crisis” and called the agreement “an historic step toward providing critical resources that address a tragic public health situation.”

“But legal battles still lie ahead for Stamford, Connecticut-based Purdue, which is spending millions on legal costs as it defends itself in lawsuits from 2,600 government and other entities,” Crain’s New York Business reported. “About half the states have not signed onto the proposal. And several of them plan to object to the settlement in bankruptcy court and to continue litigation in other courts against members of the Sackler family, which owns the company. The family agreed to pay at least $3 billion in the settlement plus contribute the company itself, which is to be reformed with its future profits going to the company’s creditors.”

The lawsuits “assert that the company aggressively sold OxyContin as a drug with a low risk of addiction despite knowing that wasn’t true,” according to USA Today. “Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged. In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the U.S. Centers for Disease Control and Prevention.”

The national newspaper continued, “In recent years, there have been more deaths involving illicit opioids, including heroin and fentanyl, than the prescription forms of the drugs. That change has happened as awareness of the dangers of prescription opioids has increased and prescribers have become more cautious. Purdue’s drugs are just a slice of the opioids prescribed, but critics assign a lot of the blame to the company because it developed both the drug and an aggressive marketing strategy.”

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