Purdue Pharma could be positioning itself to settle thousands of lawsuits related to the opioid crisis for a reported $10 to $12 billion.
According to “people familiar with the matter,” the company and its owners, the Sackler family, are plotting out a way to end the vast number of lawsuits filed against the company over its marketing practices for OxyContin and other opioid products. Earlier this year, the company reached a $270 million settlement with the state of Oklahoma for its role in the opioid crisis in that state. Still, there are some lawsuits left to be decided that could cost the company a considerable amount in damages, including two significant cases in Boston and Ohio.
Citing an unnamed source, Reuters said the company held meetings last week in Cleveland with numerous plaintiffs from state and local governments, the entities behind many of the lawsuits seeking financial restitution for public funds used to combat opioid addiction. According to the sources, the Sackler family and Purdue executives set out a plan to file for Chapter 11 bankruptcy protection “as a mechanism for implementing the settlement.” Under that settlement agreement, the Sackler family would cede control of the company, Reuters said. The source said the company has until Friday to provide an update to a federal judge on the proceedings, Reutersnoted.
This isn’t the first time there have been rumors the company was seeking bankruptcy protection. In March, there was speculation the company would do that to halt the lawsuits and allow the company to negotiate legal claims with plaintiffs.
A trial date for the Ohio trial, which has consolidated approximately 2,000 opioid lawsuits, is set for Oct. 21. That particular trial will include Purdue, as well as other pharma companies that manufacture opioids, such as Teva and Johnson & Johnson. Reuters said U.S. District Judge Dan Polster, who is overseeing this case, has been pushing for settlements. He said he was hoping to see settlements that could “do something meaningful to abate this (opioid) crisis,” Reuters said.
The Sackler family has been criticized and denigrated for its role in the aggressive marketing of OxyContin, the pain killer that has become the poster drug for the opioid crisis. Documents from the court case in Boston highlighted some of the Sackler executives’ desire to profit from the sale of the opioid. Court documents released earlier this year revealed that Richard Sackler, a former Purdue president, called for a “blizzard of prescriptions” during a launch party for OxyContin shortly after the drug had been approved by the U.S. Food and Drug Administration.
For its role in running the company, the Sackler family has suggested that its role on the board of directors was to largely oversee routine management decisions and did not have control over the marketing of the drug, Reuters said. Until recently, the Sackler family name was largely unattached to the opioid drug, despite the fact that they took home more than $4 billion from sales of OxyContin.
In its report, Reuters said Paul Hanly, a lead attorney for the plaintiffs called the report “made up” and ridiculous. BioSpace reached out to Purdue Pharma regarding the potential settlement plan, which was first reported by NBC.
“While Purdue Pharma is prepared to defend itself vigorously in the opioid litigation, the company has made clear that it sees little good coming from years of wasteful litigation and appeals. The people and communities affected by the opioid crisis need help now. Purdue believes a constructive global resolution is the best path forward, and the company is actively working with the state attorneys general and other plaintiffs to achieve this outcome,” Purdue said in a statement to BioSpace this morning.
According to that report though, the company would undergo a restructuring plan to turn itself into a for-profit “public benefit trust” for a period of at least 10 years. The company would contribute $7 to $8 billion to the trust from the sale of its drugs, while the remaining billions would come from Purdue’s cash and insurance policies, Reuters said.
