Purdue Pharma has filed for chapter 11 bankruptcy. The drugmaker is inundated with more than 2,600 lawsuits, many from local and state governments. It's accused of sparking the opioid epidemic by downplaying the level of addictiveness of its drug Oxycontin.
Filing is just one step in its tentative settlement plan. If solidified, it'll lead to several restructuring changes for the company.
The first involves its owner, the Sackler family. According to a statement from the drugmaker, the family would give up its ownership and chip in "a minimum of $3 billion" to plaintiffs over a span of seven years. There could also be another $1.5 billion pending the sale of another drug company owned by the family.
Purdue Pharma would then become a public benefit trust. Any profit it would make off Oxycontin would pay plaintiffs' claims and fund research and development of treatments for addiction and overdoses. The drugmaker said it would also agree to marketing and sales restrictions.
Restructuring would free up around $10 billion for Purdue Pharma to address the opioid crisis, according to the statement.
But 26 states aren't settling anytime soon. They argue the plan cuts the Sacklers some slack by allowing Purdue Pharma to pay off some lawsuits rather than the family itself. This comes days after the New York attorney general's office discovered roughly $1 billion in wire transfers by the Sackler family, according to a court filing.
Twenty-four states have agreed to the settlement, mainly citing a desire to end expensive litigation and start addressing the opioid epidemic. The split for or against the settlement is bound to complicate Purdue Pharma's bankruptcy process, setting the stage for a unique case.