Rumor has it that Purdue is planning to file Chapter 11 bankruptcy to halt the 2,000 lawsuits against it for deceptively marketing OxyContin to doctors and patients.
Purdue Pharma LP, the maker of OxyContin, is reportedly looking at the possibility of filing for Chapter 11 bankruptcy as it becomes apparent the company needs to address litigation associated with the approximately 2,000 lawsuits against it as a result of the opioid crisis. Purdue Pharma and the family behind the scenes, the Sacklers, are under pressure to respond to claims that the OxyContin manufacturer deceived physicians and patients about the risks associated with prolonged use of the drug. At the same time, Purdue continues to deny the allegations, stating the U.S. Food and Drug Administration (FDA) labeled the opioid with warnings clearly stating the risk of misuse. Thus, the company was forthright about the drug’s potential complications.
Filing for Chapter 11 protection would stop the lawsuits in their tracks and allow the company to attempt to negotiate the claims with plaintiffs under the supervision of a U.S. bankruptcy judge. More than 1,600 of the lawsuits mounting against Purdue Pharma and others in the industry have been consolidated under the director of Judge Dan Polster in Ohio federal court. Purdue has previously held discussions to resolve the litigation with plaintiffs’ attorneys but has not made any significant headway in the matter.
“We will oppose any attempt to avoid our claims and will continue to vigorously and aggressively pursue our claims against Purdue and the Sackler family,” Connecticut Attorney General William Tong said.
Purdue is gearing up to face a trial in May regarding a case brought about by Oklahoma’s attorney general that accuses it of contributing to fatal overdoses by “flooding the market with highly addictive opioids while falsely claiming the drugs were safe.”
Of the potential bankruptcy, Purdue responded, “Purdue is still here – ready, willing, and eager to prove in this Court that the State’s claims are baseless.” It added, “We are…committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.” However, the public was made aware that Purdue hired law firm Davis Polk & Wardwell LLP for restructuring advice in August of last year.
Massachusetts Attorney General Maura Healey became the first attorney general in June 2018 to sue not only the company but Sackler family, too. Healey said at the time, referring to the Sacklers, “Their strategy was simple: The more drugs they sold, the more money they made, and the more people died.” The filing also indicated Purdue’s leadership encouraged its “deadly misconduct” in order to generate as much as possible in revenue.
Purdue responded to the filing by stating, “We share the attorney general’s concern about the opioid crisis. We are disappointed, however, that in the midst of good faith negotiations with many states, the Commonwealth has decided to pursue a costly and protracted litigation process. We will continue to work collaboratively with the states toward bringing meaningful solutions.”
Chief Executive Officer (CEO) Craig Landau has made hundreds of recent job cuts and the drug maker has stopped marketing opioids to physicians altogether. Purdue, instead, moved to a strategy focused on developing medications for sleep disorders and cancer back in 2017. In July, it also appointed a new board chairman, Steve Miller, who has significant restructuring experience, to see what other changes could be implemented to keep the company afloat. Mortimer D.A. Sackler also stepped down from the board this month.
Sources:
Exclusive: OxyContin maker Purdue Pharma exploring bankruptcy – sources
Massachusetts sues opioid maker, executives over drug crisis
Opioid lawsuit targets rich family behind drug that fueled US crisis
Massachusetts Joins Fight Against Purdue, Names Owners in Lawsuit
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