A drug manufacturer at the heart of the nation’s opioid crisis is reportedly in negotiations to settle approximately 2,000 lawsuits over the marketing of the painkiller OxyContin. The proposed settlement of lawsuits brought by state and local governments could be worth up to $12 billion and would take ownership of Purdue Pharma away from the Sackler family, the company’s current owners.
Under the proposal, Purdue Pharma, which is based in Stamford, Connecticut, would enter into Chapter 11 bankruptcy protection and the Sackler family would give up ownership of the company. The family would also be required to contribute $3 billion in personal funds to the settlement award, according to three people familiar with the deal who spoke to reporters anonymously.
Another $1.5 billion would be contributed to the settlement amount by the sale of Mundipharma, another pharmaceutical company owned by the Sackler family. In 2016, Forbes ranked the Sacklers as the 19th-richest family in the U.S., with an estimated net worth of $13 billion.
After emerging from bankruptcy, the pharmaceutical maker would be transformed into a “public beneficiary trust,” with all profits being surrendered to the plaintiffs in the case. Purdue Pharma would also be required to provide its anti-addiction medication to the public free of charge under terms of the settlement deal.
Although Purdue Pharma failed to confirm any details of the negotiations, a statement from the company said it saw “little good coming from years of wasteful litigation and appeals.”
“Purdue believes a constructive global resolution is the best path forward, and the company is actively working with the state attorneys general and other plaintiffs to achieve this outcome,” the statements reads.
Settlement Covers Thousands Of Lawsuits
The negotiations taking place in Cleveland, Ohio involve more than 2,000 lawsuits brought against Purdue Pharma and other drug companies for their role in the ongoing opioid epidemic, which has claimed more than 2,000 lives in the United States since 2000. Purdue Pharma is seen by many as particularly responsible for the crisis due to its aggressive marketing of the opioid OxyContin while minimizing the drug’s risk of addiction.
New York Attorney General Letitia James said in a statement that the Sackler family had “started a national fire” and “made billions profiting from death and destruction.”
Jacklin Rhoads, a spokeswoman for Pennsylvania Attorney General Josh Shapiro, confirmed that the pace of the negotiations has increased.
“Our mission here has always been clear—make Purdue Pharma and the other manufacturers and distributors pay for what they did to Pennsylvania and its people, and put the Sackler family out of the opioid business for good,” Rhoads said.
On Monday, in the first opioid crisis lawsuit brought by a state to go to trial, an Oklahoma judge found Johnson & Johnson liable for its role in the epidemic and ordered the company to pay damages totaling $572 million. In March, Purdue Pharma and the Sackler family settled a similar lawsuit in Oklahoma and agreed to pay $270 million to the state.