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US states agree to Purdue Pharma bankruptcy plan

·2-min read
Purdue Pharma previously pled guilty to charges relating to aggressive promotion of OxyContin, a painkiller it knew to be addictive

Fifteen US states have dropped their opposition to a bankruptcy plan for OxyContin maker Purdue Pharma, in a step towards the pharmaceutical firm paying $4.5 billion to settle cases related to the opioid crisis.

The company is accused of having triggered the crisis, which has caused more than 500,000 overdose deaths in the United States over the past 20 years, with the highly addictive painkiller.

A mediator's report filed in a New York state bankruptcy court late Wednesday announced that the states had reached an agreement with Purdue Pharma that would see its owners, the Sackler family, provide an additional $50 million.

Under the terms of the deal, Purdue will also make public 20 million documents, including exchanges with its lawyers that have so far remained confidential.

The company will also be sold by 2024 to be replaced by a new entity managed by a trust.

The states include New York and Massachusetts which have been aggressively pursuing the company.

"While this deal is not perfect, we are delivering $4.5 billion into communities ravaged by opioids on an accelerated timetable and it gets one of the nation's most harmful drug dealers out of the opioid business, once and for all," said New York state Attorney General Letitia James.

Purdue Pharma agreed in October 2020 to plead guilty to criminal charges relating to its aggressive promotion of OxyContin, a painkiller it knew to be addictive, as part of a deal with the US Justice Department worth $8.3 billion.

The charges included defrauding federal health agencies and of paying illegal kickbacks to doctors.

The company, now a byword for the excesses of the pharmaceutical industry, filed for bankruptcy in September 2019, saying it would restructure and help tackle addiction.

The Sacklers, like many American billionaires, have made donations to prestigious institutions such as the Met Museum in New York. Many of the institutions now ban their donations.

"The family name can't be placed on any more buildings or hospital wings for a long time. We will put an end to their legacy," said Massachusetts Attorney General Maura Healey.

She added that while the terms of the settlement "are not enough" the release of the documents would "tell the whole story."

"Families, regulators, journalists, public health officials -- we will see what they did," she wrote on Twitter.

The agreement is expected to be ratified by a judge at a hearing next month but 10 states, including California, still oppose the proposals of Purdue and the Sacklers.

The opioid crisis, which has ravaged communities across the United States, has triggered a mountain of litigation.

A host of civil and criminal charges have been launched, targeting pharmaceutical firms, distributors, wholesalers, pharmacies and doctors, with some of those cases resulting in negotiated settlements for heavy damages.

pdh/ft

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