Topline: OxyContin manufacturer Purdue Pharma, owned by the billionaire
Sackler family, filed for bankruptcy protection on Sunday as part of a proposed
settlement deal with state and city governments suing it over the opioid
epidemic.
·
The firm’s board
approved a Chapter 11 filing on Sunday. According to Reuters, a member
of the Sackler family said: “It is our hope
that the bankruptcy recognition process that is now underway will end our
ownership of Purdue and ensure our assets are dedicated for the public
benefit.”
·
The tentative
settlement was first reported last week. The deal would see the Sacklers leave
the firm before it files for bankruptcy and restructures. The pharmaceutical
giant would also pay up to $12 billion to the plaintiffs and donate overdose
and addiction recovery drugs, according to reports.
·
The deal, if it
becomes final, would settle more than 2,600 lawsuits across 24 states and five
U.S. territories. However at least a further 24 states have rejected the deal
and are pursuing litigation against Purdue and the Sackler family.
·
The deal reportedly
involves the Sackler family contributing $3 billion to the settlement but the
deal has angered some activists. States, including New York and Massachusetts,
who oppose the deal want the Sacklers to stump up more of their own cash.
Key background: Purdue is facing legal challenges over its
alleged role in the U.S. opioid epidemic, a public health crisis that claimed 400,000 lives between 1999 and 2007.
The firm has been accused of deceptively marketing its prescription opioids,
including painkiller OxyContin and failing to fully warn patients and doctors
of its addictive qualities. Purdue, along with its owners the Sacklers, deny
the claims, while Chairman Steve Miller told Reuters that the bankruptcy
would be the “best hope for finalizing and implementing a global resolution to
this litigation.”
Tangent: Court papers filed on Friday reveal the Sacklers used Swiss
bank accounts to transfer $1 billion from the company, including millions taken
from a Purdue parent firm and transferred to board member Mortimer D.A.
Sackler. According to prosecutors, Sackler moved the money into shell companies
that own homes in Manhattan and the Hamptons, AP reported. The transfers
were “perfectly legal and appropriate in every respect” a spokesperson for
Mortimer D.A. Sackler told the AP.
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