Purdue Pharma owners increase settlement offer to $4.28 billion
Summary
- Money from Sackler family members is key piece of Purdue restructuring plan proposed Monday
The family that owns OxyContin maker Purdue Pharma LP agreed to pay roughly $4.28 billion—a larger sum than previously promised—to resolve lawsuits accusing it of helping to fuel the opioid epidemic.
The payment from members of the Sackler family is part of a larger restructuring plan filed Monday night in U.S. Bankruptcy Court in White Plains, N.Y., that is intended to get Purdue out of chapter 11.
The plan is a critical milestone in the Stamford, Conn.-based drugmaker’s bankruptcy and the culmination of months of negotiation between members of the Sackler family and states, personal-injury plaintiffs and other creditors.
A group of around half of all U.S. states has repeatedly demanded more money from the Sackler family, a concession included in Monday’s plan. At the time of its September 2019 bankruptcy filing, the family had agreed to pay $3 billion with the promise of up to another $1.5 billion contingent on the sale of its international business. The new offer guarantees $4.28 billion, paid in installments over the next decade.
A key piece of the restructuring plan, which includes another $1.5 billion in cash and expected proceeds from OxyContin sales, is ensuring that the money will largely be spent to help abate the nation’s opioid crisis, rather than going into the general coffers of state and local government creditors.
The plan would create special trusts that would distribute money earmarked for opioid abatement programs across the U.S. The Sacklers will have no role in Purdue’s governance or operations once it leaves bankruptcy, the company said. Instead, a reorganized Purdue will be overseen by a new, independent board focused on addressing the opioid crisis and developing and distributing medicines to reverse overdoses and treat opioid addiction.
“With drug overdoses still at record levels, it is past time to put Purdue’s assets to work addressing the crisis," Purdue Chairman Steve Miller said. “We are confident this plan achieves that critical goal."
Purdue’s chapter 11 plan must be approved by a bankruptcy judge and likely will be challenged in court by individuals who have suffered injuries from opioids and state attorneys general who have not signed onto the deal. A final resolution isn’t expected before the summer.
“We’re going to keep fighting for the accountability that families all across this country deserve," said Massachusetts Attorney General Maura Healey, who, along with 23 other attorneys general, voiced opposition to the plan Monday and called for greater transparency and more money upfront from the Sacklers.
In exchange for their multibillion-dollar contribution, the Sacklers would get legal releases freeing them from opioid-related litigation. Purdue said in court papers the releases are an integral part of the proposed restructuring but negotiations over the scope of the releases are ongoing.
Members of the Sackler family have denied wrongdoing. Sackler family representatives said they hope the restructuring proposal released Monday “will signal the beginning of a far-reaching effort to deliver assistance where it is needed."
The Monday proposal is broadly the same as the deal they entered bankruptcy with in 2019 but includes some concessions to broaden support. New court filings say the law firm Purdue retained to handle the bankruptcy has investigated potential legal claims the company could have against the Sacklers.
Outside of its bankruptcy, Purdue pleaded guilty in November to three federal felonies, including paying illegal kickbacks and deceiving drug-enforcement officials. Sackler family members agreed the prior month to pay $225 million to resolve civil claims with the Justice Department, without admitting any liability.
OxyContin, a powerful painkiller introduced in 1996, has been a primary focus of public ire over widespread opioid addiction that has gripped the nation for decades. Purdue first faced a reckoning over its aggressive marketing in 2007, when it reached settlements over criminal charges that it misled the public about addiction risk. The wave of lawsuits that drove it into bankruptcy began building in 2017.
This story has been published from a wire agency feed without modifications to the text.
