Purdue Pharma is the drug company which makes the quite controversial pain medication known as Oxycontin. They filed for bankruptcy protection which will help them to temporarily stop the thousands of lawsuits coming in with alleged claims that the company made billions of dollars while contributing to the opioid crisis in America. Unfortunately, the abuse of opioids has caused the deaths of 400,000 people since 1999.
Purdue Pharma Goes Bankrupt
The news about the bankruptcy were first reported by the Wall Street Journal and it happened after the private owners of the company, the Sackler family, reached a tentative settlement with some of the approximately 2000 local governments that are suing them.
The agreement involves forfeiting around $10 billion over a period of seven years with around $3 billion coming from the Sackler family’s personal fortune that’s estimated to be more than $13 billion.
The prosecutors want the family to give around $4.5 billion from their personal wealth; however, they’ve rejected this.
Moreover, neither the company nor the family admitted foul play during the settlement talks and the family won’t probably face prison for the alleged crimes.
The board of the company approved the settlement from Chapter 11 and bankruptcy was part of the company’s proposed settlement plan.
The Settlement Plan Will Continue the Oxycontin Production?
Steve Miller, chairman of the company’s board of directors said that the settlement prevents wasting hundreds of millions of dollars and years of litigation and that they will instead direct billions to communities in the country that are affected by the opioid crisis.
According to the plan, Purdue Pharma will be managed by a board of trustees and a new company will be created to continue the sale of Oxycontin, a potent medication which is highly addictive.
Nowadays, doctors are reducing the prescriptions of opioids from several years ago, however; some claim that this will prevent people with serious pain couldn’t get the needed relief.
The Downfall of Purdue Pharma
The company did plead guilty back in 2007 for misbranding Oxycontin and understating the risks of addiction; however, in the past decade, they’ve been very combative and have spent big sums of money to better their public relations.
The family has given millions to philanthropic organizations, but non-profit organizations have begun reassessing money from the family due to their name being associated with bad news.
Earlier this year, the Guggenheim in New York, the Tate museums in London, and the UK National Portrait Gallery have announced that they’ll stop accepting money from the Sacklers.
Robert Drain, US Bankruptcy Judge, is overseeing the proceedings and Purdue wants the lawsuits to cease. Any resumption of litigation would quickly reduce the company’s resources, claims the company’s chairman, Miller.