Sep 17, 2019

Purdue Pharma's bankruptcy test

Purdue Pharma's bankruptcy filing won't end the lawsuits. Photo: John Moore/Getty Images

Purdue Pharma's first bankruptcy hearing starts today, commencing a process that will attempt to resolve 2,600 lawsuits that accuse the OxyContin maker of instigating an opioid crisis that has killed tens of thousands of Americans.

The big picture: Purdue is using bankruptcy as a tool to expedite legal remedies, but many state and local governments are ready to sue the Sackler family owners beyond bankruptcy court, arguing the family doesn't deserve bankruptcy protection.

Driving the news: To speed up the legal proceedings, several plaintiffs in the national opioid lawsuit have supported a settlement that would turn Purdue into a public benefit trust corporation, remove the Sacklers as owners, and allow governments to collect all future OxyContin profits.

  • Purdue declaring bankruptcy, and thus removing itself as a defendant, is part of the deal. Purdue and the Sacklers have admitted no wrongdoing.

Yes, but: Many states are preparing separate lawsuits against the Sacklers, arguing that the settlement is insufficient to help those struggling with addiction and that Purdue's bankruptcy is a maneuver to protect the Sacklers' wealth.

Where it stands: North Carolina Attorney General Josh Stein told Axios he is filing a lawsuit against the Sacklers in state court "imminently." More will follow.

  • "Purdue is a carcass of a drug company," Stein said. "The value is with the Sackler family. They should not get the benefit of protection from bankruptcy courts."

Between the lines: A major sticking point is what the Sacklers specifically will pay, considering they have taken out Purdue's assets over the years.

  • The Sacklers would pay $3 billion toward the tentative settlement, and possibly another $1.5 billion if a separate Purdue subsidiary is sold at a certain price. But Stein said all, not some, of the restitution from the Sacklers should be guaranteed.
  • The Sacklers have siphoned billions more dollars from Purdue into a complex web of offshore tax havens and trusts, the AP recently reported.
  • As one example, one of the trusts that owns Purdue is registered in a British territory off the coast of France, according to the bankruptcy filing.

Go deeper: Purdue's bankruptcy filing

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Purdue Pharma faces resistance to its proposed opioids settlement

Protestors outside of Purdue Pharma's headquarters last month. Photo: Erik McGregor/LightRocket via Getty Images

Purdue Pharma has to resolve ongoing inquiries with the Justice Department before finalizing its plan to enter bankruptcy, the Wall Street Journal reports, citing the newly released terms of the settlement.

Why it matters: Purdue's bankruptcy plan, and its proposed settlement to resolve the national opioids lawsuit, are already facing resistance from state and local governments.

Go deeperArrowOct 10, 2019

Drugmakers eye unusual opioids settlement

Illustration: Sarah Grillo/Axios

Drug companies facing expansive litigation over their role in the opioid crisis are exploring settling the cases by participating in Purdue Pharma's bankruptcy, the Wall Street Journal reports.

Why it matters: If successful, this would either end or shrink the massive federal case pending in Ohio, but it would require a lot of buy-in, including from state attorneys general. The companies — Endo, Johnson & Johnson, Teva, Allergan and Mallinckrodt — want to contribute money to a trust while being released from all liability.

Go deeper: Purdue Pharma's bankruptcy test

DOJ watchdog slams DEA for approving large surge in opioid production

Photo: Eric Baradat/AFP/Getty Images

The Drug Enforcement Agency authorized manufacturers to continue producing substantial amounts of the narcotic painkiller oxycodone between 2002 and 2013, despite the dramatic increase in deaths from opioid overdoses, according to a report by the Justice Department's inspector general released Tuesday.

Why it matters: Drug companies have been the target of blame for the drastic climb in opioid overdose deaths in the U.S. over the past 2 decades, and they're now facing thousands of lawsuits from cities and other communities. The companies' defense in many of these lawsuits is that they were producing pills at a level permissible by the DEA.

Go deeperArrowOct 1, 2019