Purdue Pharma Seeks Bankruptcy Protection, Settlement of Opioid-Related Cases
The parties included in this agreement in principle represent some of the more than 2,600 lawsuits filed against Purdue Pharma concerning opioids, including the company’s OxyContin products.
Purdue Pharma has filed for Chapter 11 bankruptcy protection as part of a plan for settling some of the opioid-related litigation it faces in federal and state courts across the country.
These settlements have an estimated value of more than 10 billion dollars.1
The company has announced the agreement in principle for the settlement framework with 24 state attorney generals, officials from 5 United States territories, the Plaintiffs’ Executive Committee in the multidistrict litigation (MDL), and co-lead counsel in the MDL.1 The parties included in this agreement in principle represent some of the more than 2600 lawsuits filed against Purdue Pharma concerning opioids, including the company’s OxyContin products.2
The more than 2600 civil actions filed against Purdue Pharma generally allege that the company engaged in deceptive and false marketing tactics to sell its opioid products and is liable for the ongoing national opioid crisis.2
Purdue Pharma has denied claims made against the company in these lawsuits.2
In a statement, Florida’s Attorney General Ashley Moody called the agreement with Purdue Pharma “historic.”
She said that it holds the company responsible for its role in the national opioid crisis.3
“Sadly, this agreement cannot bring back those who have lost their lives to opioid abuse, but it will help Florida gain access to more life-saving resources and bolster our efforts to end this deadly epidemic. I want to assure Floridians that we will continue to aggressively pursue our state case against all remaining defendants,” Moody said. 3
According to the bankruptcy case, filed in the United States Bankruptcy Court Southern District of New York, the settlement announced would have Purdue Pharma’s shareholders transfer all the privately held company’s assets to a trust or other entity established for the benefit of claimants and for people in the United States, while relinquishing their own equity interests. All of Purdue’s ex-United States pharmaceutical companies would be sold.1,2
The new company would be governed by a new board whose members would be chosen by claimants and approved by the bankruptcy court, and it would be permanently bound to marketing restrictions on the promotion and sale of opioid products.1 In addition, the company-owning Sackler families would contribute a minimum of $3 billion to the settlement, to be paid over 7 years. 1,2
“The settlement puts the Sacklers out of the drug business permanently—not just in the United States, but around the globe. It takes every last dime that Purdue has and billions more from the Sacklers personally,” Ohio Attorney General Dave Yost said in a statement.4
In a statement released Sunday, Purdue Pharma’s Chairman Steve Miller said that the litigation resolution is expected to dedicate the company’s assets and resources for the public’s benefit.1
“This settlement framework avoids wasting hundreds of millions of dollars and year 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,” he said.1
Yost said years of additional litigation was the only alternative to the settlement.4
“Although there is no dollar amount that will undo the pain that so many families have faced, I’m focused on getting resources to Ohioans as quickly as possible, and this bipartisan deal makes that a reality. Ohio is in,” Miller said. 4
Purdue Pharma previously settled litigation with the State of Oklahoma with a 270 million dollar agreement that includes establishment of the National Center for Addiction Studies and Treatment at Oklahoma State University in Tulsa.5
- Agreement in Principle on Landmark Opioid Litigation Settlement [news release]. Stamford, CT; September 15, 2019. https://www.purduepharma.com/news/2019/09/16/purdue-pharma-announces-agreement-in-principle-on-landmark-opioid-litigation-settlement/. Accessed September 16, 2019.
- Debtors Informational Brief. Case 19-23649. United States Bankruptcy Court Southern District of New York. Filed September 16, 2019. Accessed September 16, 2019.
- STATEMENT: Attorney General Moody Issues Statement on Multibillion-Dollar Agreement in Principle with Purdue Pharma [news release]. Tallahassee, FL; September 11, 2019: Florida Attorney General's website. http://www.myfloridalegal.com/newsrel.nsf/newsreleases/B4EF076EBBACB1178525847200771E99?Open&. Accessed September 16, 2019.
- Statement From AG Yost on Purdue Pharma’s Bankruptcy Filing [news release]. Columbus, OH; September 16, 2019: Ohio Attorney General’s website. https://www.ohioattorneygeneral.gov/Media/News-Releases/September-2019/Statement-From-AG-Yost-on-Purdue-Pharma-s-Bankrupt. Accessed September 16, 2019.
- Coppock K. Opioid Maker Agrees to Pay $270M for Addiction Treatment in Oklahoma. Pharmacy Times. https://www.pharmacytimes.com/news/opioid-mak-agrees-to-pay-270m-for-addiction-treatment-in-oklahoma. Published March 26, 2019. Accessed September 16, 2019.