OxyContin manufacturer Purdue Pharma has filed a bankruptcy plan that promises to provide billions of dollars towards opioid settlements.
Different Kind of Company to Be Created
Purdue Pharma’s plan was filed in U.S. Bankruptcy Court on March 15, 2021, following months of negotiations over possible opioid settlements on hundreds of thousands of lawsuits against the pharmaceutical giant. The $10 billion plan would allow Purdue to emerge from bankruptcy and “transform” itself into a different kind of company that funnels its profits into the fight against the epidemic it allegedly helped to create.
The as-yet-unnamed new company would continue to sell a number of medications, including OxyContin, with revenues channeled into two trusts that would own it indirectly – one that would represent state and local governments’ interests and another representing Native American tribes. These entities would use future profits from the company to pay for monitoring the health of children born in opioid withdrawal, medical treatment, drug education, and opioid abatement programs.
Opioid Settlements to Be Paid Out Over Next Decade
Under the plan, Purdue Pharma would pay approximately $500 million in cash up front towards opioid settlements with state and local governments, Native American tribes, hospitals, and other entities. Additional payments would reportedly be spread out over the next decade, including installments totaling roughly $4.2 billion from members of the Sackler family, who currently own Purdue. The proposal further states that additional money would come from insurance claims and that Purdue would also provide overdose antidotes and anti-addiction drugs valued at over $4 billion.
While there was no fixed schedule provided for the timing of most of these disbursements, the company predicted that its sales would generate as much as $1 billion in further payouts towards opioid settlements by 2024, at which point the plan would be to sell or otherwise transform the company again.
Additionally, the plan calls for opioid settlements on nearly 135,000 claims from individual victims and their families that would total $700 million to $750 million over time – an average payment of just under $5,600.00.
Plan “Falls Short” of Accountability
Parties who currently have claims against Purdue have until later this year to vote on whether to accept its bankruptcy plan, which also calls for creating a public repository of company documents. While most of these parties support the plan, attorneys general for 23 states and the District of Columbia issued a statement saying that the offer “falls short of the accountability that families and survivors deserve.”
They are demanding more money for opioid settlements from Sackler family members, as well as for Purdue to wind itself down in a way that “does not excessively entangle it with states.”
“The Sacklers became billionaires by causing a national tragedy. Now they’re trying to get away with it,” said Massachusetts Attorney General Maura Healey. “We’re going to keep fighting for the accountability that families all across this country deserve.”
Purdue Pharma began selling OxyContin 25 years ago, encouraging doctors to dismiss long-held reservations about opioids and to prescribe them to treat chronic pain. Subsequent litigation has shown that Purdue continued its marketing efforts even after it became clear that OxyContin was being abused.
Since 2000, more than 470,000 deaths in the United States have been linked to opioids, with the country topping 50,000 opioid-related fatal overdoses for the first time in 2019.
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