Purdue Pharma, the Stamford, Connecticut-based company controlled by the Sackler family that has made a fortune with its aggressive marketing of the opioid-based painkiller OxyContin, last night filed for Chapter 11 protection in a federal bankruptcy court in White Plains, New York.
“Purdue’s board approved the much-anticipated bankruptcy filing days after reaching a tentative deal to settle some 2,000 opioid lawsuits filed by local governments, Native American tribes and states suing the company over the toll of opioids,” writes CNBC’s Berkeley Lovelace Jr.
“‘This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation,’ said chairman of Purdue’s board of directors, Steve Miller, in a statement. He said it ‘instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,’” Lovelace reports.
“The company’s move to seek financial shelter, part of a tentative settlement with thousands of litigants, will shift the focus to new wrangling over how potential proceeds will be divvied up by communities reeling under the burden of addiction and overdose deaths,” Christopher Rowland writes for The Washington Post.
“The bankruptcy also will raise the stakes on legal sparring over how much of the personal fortunes of the billionaire Sackler family, which owns Purdue, will be available to compensate plaintiffs. Multiple states that have rejected the proposed settlement have accused the family of improperly stripping billions of dollars out of the company’s coffers in the past decade to protect the cash from expected court judgments days after reaching a tentative settlement with many of the state and local governments suing it over the toll of opioids,” Rowland continues.
Meanwhile, “the New York attorney general’s office said on Friday 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,” Danny Hakim writes for The New York Times.
“Forbes has estimated that the family fortune is worth $13 billion, a figure the family has not disputed, but many state attorneys general believe that the family has far more hidden away, as a safeguard against the cascade of litigation,” Hakim reports.
“A spokesperson for Mortimer D.A. Sackler called the attorney general’s contention an attempt to ‘torpedo a mutually beneficial settlement that is supported by so many other states and would result in billions of dollars going to communities and individuals across the country that need help.’ The transfers were ‘perfectly legal and appropriate in every respect,’ the spokesperson said,” the AP’s Adam Geller reports.
Purdue has not admitted to any wrongdoing as part of settlement negotiations.
“Purdue has pointed out that its products were approved by the Federal Drug Administration and that doctors were prescribing them to address patient pain. But the plaintiffs in the suits argue that company officials intensively marketed opioids and downplayed their addictive risks, laying the groundwork for the opioid crisis, which has claimed tens of thousands of lives and is often described as a national emergency,” NPR’s Bobby Allyn writes.
“OxyContin, Purdue’s signature product, has had more than $35 billion in sales since it launched in 1996. Questions about the drug’s addictive nature have dogged Purdue over most of that time,” Sara Randazzo and Jared S. Hopkins report for The Wall Street Journal.
“Purdue’s share of the opioid painkiller market never exceeded 4% from 2006 to 2012, according to a Journal analysis of more than 378.6 million transaction records in a Drug Enforcement Administration database made public during the litigation. During that period the company had as much as 13% of the market for oxycodone, the active ingredient in OxyContin, the data show,” they add.
“More than 70,000 people died of drug overdoses in 2017, and around two-thirds of those deaths were linked to opioids. While these deaths are increasingly linked to illicit opioids like heroin and fentanyl, the rise in opioid misuse, addiction, and overdose originally began with the proliferation of prescription painkillers -- which were overprescribed by doctors, allowing the drugs to flow not just to patients but to the friends and family of patients, teens rummaging through parents’ medicine cabinets, and the black market,” writes German Lopez for Vox.