BY BOWEN XIAO
Pharmaceutical company Purdue Pharma—which made billions of dollars selling its prescription painkiller OxyContin—has filed for bankruptcy after giving way to financial pressure from thousands of lawsuits alleging the company helped fuel the United States’ opioid epidemic.
The Sept. 15 filing at a federal bankruptcy court in New York is part of a tentative agreement Purdue reached “in principle” with 24 state attorneys general and analogous officials from five U.S. territories, in relation to settling their opioid litigation. Since the introduction of OxyContin in 1996, addiction and overdoses have surged.
The privately held company aims to restructure under terms of a proposal to settle the widespread litigation. The more than 2,600 lawsuits assert that the company aggressively sold OxyContin as a drug with a low risk of addiction, despite knowing that wasn’t true.
According to Purdue, their settlement restructure is estimated to provide “more than $10 billion” in value to address the deadly opioid crisis. When asked for additional comment, a Purdue spokesperson referred The Epoch Times to a company press release.
“This settlement framework avoids wasting hundreds of millions of dollars and years 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,” Steve Miller, chairman of Purdue’s board of directors, said in a statement.
However, two dozen states remain opposed or uncommitted to the proposed settlement, setting the stage for contentious legal battles over who bears responsibility for a public health crisis that claimed the lives of nearly 400,000 people between 1999 and 2017, according to the latest U.S. data.
The main elements of the settlement, according to Purdue, range from the owners of the company contributing all assets to a trust or entity for the benefit of claimants, as well as the families of Purdue contributing a minimum of $3 billion.
To implement the settlement agreement, Purdue filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Purdue stated that the “court-supervised process” is aimed to, among other things, facilitate “an orderly and equitable resolution of all claims against Purdue, while preserving the value of Purdue’s assets for the benefit of those impacted by the opioid crisis.”
Purdue’s OxyContin is just one of many opioids prescribed, but critics assign a lot of the blame to the company because it developed both the drug and an aggressive marketing strategy. The lawsuits, which seek billions of dollars in damages, allege that Purdue and its owners misled doctors and patients about addiction and overdose risks.
The company hasn’t admitted to any wrongdoing and doesn’t intend to, Miller said in a conference call with reporters.
The Sackler family, whose members founded Purdue, told The Epoch Times that they have “deep compassion for the victims of the opioid crisis” and they believe the settlement framework “is an historic step towards providing critical resources that address a tragic public health situation.”
“It is our hope the bankruptcy reorganization process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit,” the Sackler family said via email.
Days before the bankruptcy filing, New York Attorney General Letitia James said her office found Sackler family members used Swiss bank accounts, and other bank accounts, to transfer roughly $1 billion to themselves. In a Sept. 16 statement, James said the bankruptcy filing, made just two days after her office made the revelation, shouldn’t have come as a shock.
“In no uncertain terms, any deal that cheats Americans out of billions of dollars, allows the Sacklers to evade responsibility, and lets this family continue peddling their drugs to the world is a bad one, which is why New York remains opposed to it,” James said.
A separate lawsuit filed by the Massachusetts attorney general stated that Purdue persuaded doctors who were reluctant to prescribe strong painkillers.
The bankruptcy filing follows an Oklahoma judge’s order in August, in which Johnson & Johnson was told to pay $572.1 million to the state for deceitfully marketing addictive opioids. The sum was less than what investors had expected, according to Reuters.
The Trump administration, meanwhile, is increasing its efforts to quell the opioid epidemic. Earlier this month, the U.S. Department of Health and Human Services announced nearly $2 billion in funding to states. The funding would expand access to treatment and also support near-real-time data on the drug overdose crisis.
The funding follows a series of private-sector advisories released by the administration in August to help businesses protect themselves and their supply chains from inadvertent trafficking of fentanyl and synthetic opioids. Each day, more than 130 people across the United States die from an opioid overdose, according to the National Institute on Drug Abuse.
The total economic burden per year from the opioid epidemic is estimated to be $78.8 billion, a study conducted by the National Center for Injury Prevention and Control, and the Centers for Disease Control and Prevention found. An increase in health care and substance abuse treatment costs account for more than one-third of the total amount.
Reuters and The Associated Press contributed to this report.
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