The company that made billions selling OxyContin has filed for bankruptcy protection

The company that made billions selling OxyContin has filed for bankruptcy protection

The company that made billions selling OxyContin has filed for bankruptcy protection

Montana is one of the states that reached a tentative settlement this week of its lawsuit against opioid manufacturer Purdue Pharma, but state officials Friday said many details have yet to be determined.

The Chapter 11 filing, announced late Sunday, is part of a proposed $10bn settlement of legal cases alleging the company profited from the United States opioid addiction epidemic.

States suing the Sacklers, including several over the past week, allege the family improperly reaped billions of dollars from opioid sales despite knowledge of their harmful effects.

As part of the settlement, Purdue says it will potentially provide communities with millions of addiction treatment drugs, at no or low cost, to help tackle the crisis. The company said the trust's assets should reach $10bn, including up to $4.5bn from the Sackler family, which owns Purdue. A showdown in bankruptcy court in White Plains, New York, could come as early as this week.

Purdue reached a tentative deal to resolve lawsuits with 24 states and five U.S. territories, as well as lead lawyers for more than 2,000 cities, counties and other plaintiffs, the company said.

As some states agreed to the deal last week, others expressed frustration about the amount of money, saying the family should guarantee more - and that the tentative settlement didn't hold the family or company sufficiently accountable for their roles in causing an opioid crisis that has killed more than 400,000 Americans in the past two decades.

One lawyer who is suing Purdue on behalf of clients including the city of Albuquerque, New Mexico, and the state of Utah, which has signed on to the tentative settlement, said it's always been a consideration that Purdue could not afford to pay the massive amounts being sought in the lawsuits. The deal also calls for handing the company over to trustees and giving future profits from OxyContin and drugs in development to creditors.

"We are hopeful of and expectant that a growing number of states will see this is a much better outcome for them than for us to go into the swamp of litigation that would basically eat up all the resources of the company, " Purdue Chairman Steve Miller said in a conference call with reporters Sunday night.

Miller said a statement that the restructuring will avoid "wasting hundreds of millions of dollars and years on protracted litigation". Forbes has estimated the Sackler family's total worth at $13 billion.

"The Sacklers are going to be left with plenty of money after this, " Levitin said.

"I don't think there's enough money in that company to pay for the damages that are claimed", said Jonathan Novak. "It is our hope the bankruptcy reorganisation process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit", the family said.

That is one reason there are other defendants in most opioid lawsuits, he said, including members of the Sackler family and huge drug distribution companies such as McKesson Corp. and Cardinal Health.

Purdue and the Sacklers have denied the allegations.

The maker of the painkiller OxyContin said in a statement that the bankruptcy was the next step in implementing the agreement to pay billions of dollars to the states and local and tribal governments that accuse the pharmaceutical giant of helping to drive the opioid crisis.

More than 200,000 people have died from prescription opioid overdoses since 1999, according to federal statistics.

Purdue has pointed out that its products were approved by the Federal Drug Administration and that doctors were prescribing them to address patient pain. The company paid more than $600 million in fines and other payments. Lawsuits also are pending against generic oxycodone manufacturers, distributors and retail pharmacy chains.

"Between 2008 and 2018, they directed Purdue to make almost $11 billion in total distributions (including tax distributions) to partnered companies, foreign entities, and ultimately to trusts established for the benefit of the Sackler families, " said recently unsealed portions of a lawsuit filed this year by Oregon's attorney general. That entity, run by trustees appointed by a bankruptcy judge, also will oversee payouts to state and local governments that sued.

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