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Home / US / Purdue Pharma applies for bankruptcy as part of liquidation

Purdue Pharma applies for bankruptcy as part of liquidation

Purdue Pharma, the billion-dollar company that sold OxyContin, a prescription painkiller, filed for bankruptcy in White Plains, New York, a few days after a preliminary deal was reached with many state and local authorities over the sale of Opioids had complained. [19659002] The submission was expected before and after the preliminary deal, which could amount to as much as $ 12 billion over time, was completed.

"This framework avoids wasting hundreds of millions of dollars and years on lengthy litigation," Steve Miller Purdue's CEO said in a statement, "Instead, communities across the country are being given billions of dollars and important resources, to deal with the opioid crisis. We will continue to work with Attorney General and other plaintiff representatives to finalize and implement this agreement as soon as possible. "

Purdue, Stamford, Connecticut, still faces legal disputes that cost millions for legal costs. It defends itself in lawsuits filed by 2,600 government and other bodies. About half of the states did not sign the proposal. And some of them are planning to appeal against the settlement before the bankruptcy court and to conduct further litigation against members of the Sackler family who own the company. The family agreed to pay at least $ 3 billion for the settlement and contribute the business itself, with future profits earmarked to the company's creditors.

In a statement, the families of the deceased company owners Mortimer and Raymond Sackler said they had "deep compassion for the victims of the opioid crisis" and believe that the settlement framework "is a historic step towards providing critical resources for a tragic public health situation is ".

The amount of the deal was objected Some officials say that the $ 1

2 billion mark will not be reached, and because this means the company will not be held accountable by a jury or a judge.

Purdue Miller chairman said the company did not acknowledge wrongdoing and did not intend to do so. "The alternative is not to settle the lawsuit, but to continue," he said in a teleconference with reporters. "The resumption of litigation would quickly reduce all resources of the company and cause losses all around. Whatever people want, it's not on the table right now.

Because so many states opposed the agreement, this could complicate the bankruptcy process. The Sackler family members said they were still trying to get more states to sign.

"We are confident that the parties that are not yet supported will eventually shift their focus to the critical resources that the settlement provides to people and the issues they need," they said.

One of the crucial issues that could be resolved is whether the lawsuits against the Sacklers can go ahead in the state courts and what will happen to the company itself. Under the interim settlement agreement, it would continue to function, but with profits used to settle the settlement. Another possibility could be for a judge to order the sale.

According to court records, members of the Sackler family received more than $ 4 billion from Purdue USA from 2007 to 2018, which could complicate claims against the family for opioids.

A court filing on Friday by the New York prosecutor alleged that Sackler's family members used Swiss and other hidden accounts to transfer $ 1 billion to themselves. The discovery of the transfers underscores the claims of several states that family members have been working to protect their wealth due to the growing legal threat and influence of Purdue.

The Sacklers have donated money to cultural institutions around the world, including the Smithsonian Institution, New York's Metropolitan Museum of Art, and London's Tate Modern.

The lawsuit states that the company has aggressively sold OxyContin as a drug with a low search risk, although it knew it was not. Opioid, introduced in 1996, addiction and overdoses have increased. Both in 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the United States Centers for Disease Control and Prevention.

In recent years there have been more deaths with illegal opioids, including heroin and fentanyl, than on prescription forms of the drugs. This change has occurred as awareness of the dangers of prescription opioids has increased and prescribers have become more cautious.

Purdues drugs are only part of the prescribed opioids, but critics blame the company for having developed both the drug and an aggressive marketing strategy.

According to a lawsuit filed by the Massachusetts Attorney General, the company has generated large sales of OxyContin from the outset. This meant persuading doctors who refused to prescribe such strong analgesics that it was safe.

A lawsuit indicates that Richard Sackler, then senior vice president of sales for the company, told the sales team at a launch party for the drug: "The launch of OxyContin Tablets is followed by a blizzard of prescriptions that will bury the competition. The prescription Blizzard will be so deep, dense and white. "

Along with other industry-paid Purdue physicians who certify the safety of the drug and become a major funder to groups of people who use pain relief and opioids.

The Associated Press and the Center for Public Integrity also noted that the industry it financed and the groups it finances were also politically active, spending more than $ 880 million on lobbying and campaigning from 2006 to 2015 strong pain medication.

All these issues are part of the litigation currently facing the pharmaceutical industry. The governments that are complaining call for the reimbursement of costs associated with the opioid crisis and the funding of drug treatment and abuse prevention programs.

In court records, Purdue has indicated that its products have been approved by federal agencies and prescribed by doctors.

A federal judge overseeing nearly 2,000 cases has urged the parties to reach a great deal that would make a difference in the opioid crisis. Cleveland-based judge Dan Polster has appealed October for the claims filed by the Cuyahoga and Summit districts in Ohio.

A lawyer sues Purdue on behalf of clients including the city of Albuquerque, New Mexico and The State of Utah, which has signed the interim agreement, said Purdue could not afford the massive sums for a long time pay that were sought in the lawsuits.

"I do not think there's enough money to pay for the alleged damage in this company," said Jonathan Novak.

This is one of the reasons why most defendants face other defendants, including members of the Sackler family and large drug distributors such as McKesson Corp. Cardinal Health. State and local governments have also fought to see how national settlements could be distributed.

Organizations facing major litigation have had a long history of bankruptcy filings since the 1980s.

Dozens of asbestos companies have done so since the 1980s. Last year, US Gymnastics filed for protection for being in court for sexual abuse by team doctor Larry Nassar.

At the beginning of this year, Pacific Gas & Electric Corp. applied. Bankruptcy protection, as the company may have billions of dollars in damages due to catastrophic lawsuits recorded in California forest fires.

And in June, another company producing opioids, Insys Therapeutics, filed for bankruptcy just days after reaching an agreement with the federal government on a $ 225 million kickback program. Now an insolvency judge must clarify how much of it will be paid.

Vincent Buccola, lawyer and professor of business ethics, said Purdue may be trying to avoid the opioid epidemic in states that have been seriously injured.

"This is not the jury you want to face," said Buccola, who teaches at the University of Pennsylvania. "So you could try to stop this lawsuit and consolidate it before the bankruptcy judge you hope is cheaper."

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