Sep 16, 2019

Purdue Pharma files for bankruptcy

Photo: Drew Angerer/Getty Images

Purdue Pharma, the maker of the highly addictive painkiller OxyContin, which faced thousands of lawsuits over the U.S. opioid epidemic, has filed for Chapter 11 bankruptcy, the drug company said in a statement Sunday

The big picture: Per the Wall Street Journal, Purdue filed for bankruptcy with a more than $10 billion plan to settle claims in White Plains, New York — less than a week after reaching a tentative settlement with states and local governments suing the firm for its role in the opioid epidemic.

  • The Justice Department had launched civil and criminal investigations into whether Purdue failed to properly monitor illegal prescribing and ordering patterns for OxyContin.
  • Purdue's board of directors voted Sunday evening to approve a settlement in principle, the New York Times reports.

Our thought bubble, per Axios' Bob Herman: Purdue was expected to file for bankruptcy regardless of a national settlement, and it ultimately could protect the Sackler family’s wealth against all governments and creditors.

What they're saying: Steve Miller, chairman of Purdue’s board of directors, said in a statement on the company's website, "This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public."

"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."

What's next: The bankruptcy "filing is expected to lead to the ultimate demise of a company that sold a fraction of the opioid prescriptions" but is "most closely identified with the epidemic because of its pioneering role in the sale of narcotic pain pills," notes the Washington Post, which first reported the news.

Editor's note: This article has been updated with new details throughout.

Go deeper

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

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.

Go deeperArrowSep 17, 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