Topline
OxyContin manufacturer Purdue Pharma, owned by members of the billionaire Sackler family, said on Tuesday its creditors voted in “overwhelming” support of a proposed bankruptcy deal to settle thousands of lawsuits and shield the family from further litigation over its alleged role in fomenting the ongoing opioid crisis.
Purdue Pharma, the maker of OxyContin, was accused of aggressively marketing the drug while ... [+]
Key Facts
Stamford, Connecticut-based Purdue said: “More than 95% of the 120,000-plus votes submitted” were in favor of the reorganization plans.
The bankruptcy plans, which the company valued at $10 billion, would settle thousands of lawsuits over the alleged role Purdue and members of the Sackler family played in fueling the nation’s opioid epidemic.
If successful, the settlement will see assets, money and doses of opioid addiction treatment and reversal medications distributed to communities across the country, cover personal injury claims and have Purdue’s assets “transferred to a new company” that will operate in “a responsible and sustainable manner” in consideration of the opioid crisis.
The plans would also shield the Sacklers, who have repeatedly denied wrongdoing and whose fortune Forbes estimated to be $10.8 billion in December, from further lawsuits.
A final confirmation hearing on the plan is scheduled for August 9.
Key Background
Purdue has been accused of playing a key role in starting America’s opioid crisis through aggressively and deceptively marketing its painkillers while simultaneously downplaying risks of overdose and addiction. OxyContin, a powerful narcotic, was an incredibly successful product for Purdue, which denies the claims against it. The medicine generated around $30 billion in revenue for the company over the years, according to the Committee on Oversight and Reform of the U.S. House of Representatives. Purdue is not the only company to be pursued for allegedly fueling the opioid epidemic—Johnson & Johnson, McKesson, AmerisourceBergen and Cardinal Health struck a $26 billion deal with U.S. state attorneys general in July to resolve litigation.
Big Number
841,000 . That’s how many people died from a drug overdose in the U.S. between 1999 and 2019, according to the CDC. Over 70% of overdose deaths involved an opioid, it said, calling overdose a “leading cause of injury-related death in the United States.” Two out of three overdose deaths involved an opioid. The CDC said an increase in drug overdoses in 2020 was a significant contributor to America’s declining life expectancy.
What To Watch For
The votes are preliminary but not expected to change significantly, Purdue said in a statement. The release of the involved Sacklers and their fortune from future liability is contentious but permissible under current bankruptcy law. Legislators have used the Purdue case to push for new laws that prevent people from using corporate bankruptcies to shield personal wealth.
Further Reading
OxyContin maker Purdue's creditors vote in favor of bankruptcy plan (Reuters)
Sackler Family Members Come Out Fighting With New Website Ahead Of OxyContin Settlement Confirmation (Forbes)
Despite Years Of Litigation, The Sackler Family Behind OxyContin Is Still Worth Billions (Forbes)
