Drug company falls into bankruptcy

The makers of Oxycontin face an extremely large settlement after battling thousands of lawsuits.

By Gabriel Arizon, Editor-in-Chief

The pharmaceutical company behind Oxycontin has filed for Chapter 11 bankruptcy after reaching a tentative deal that would settle lawsuits for its alleged role in fueling the opioid crisis.

On September 15, Purdue Pharma’s board of directors filed for bankruptcy in New York. They agreed to settle lawsuits from 2,600 local governments and other entities, including 24 state attorneys general. The lawsuits, estimated around $10 billion, claim that Purdue helped to stoke the crisis by marketing the addictive drug while simultaneously downplaying its side effects.

In the filing, the Sackler family (which owns Purdue) agreed to relinquish ownership of the company. They also agreed to provide $3 billion in cash over seven years and the revenue from any further sales of the painkiller, to aid communities impacted the hardest by the addiction crisis.

In a statement to NPR, Chairman of Purdue’s board of directors Steve Miller said, “This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities … trying to cope with the opioid crisis.”

Nearly every state in the country (with the exception of Nebraska and Michigan) filed a lawsuit against the company, according to CNBC. While many state attorneys generals’ offices favor the settlement, some are looking to file suits against the Sackler family itself and go for their wealth.

According to NBC News, out of the 42 responses it got from states and territories involved, 21 states favored the deal, while 20 states and the District of Columbia opposed it.

“Minnesota is not part of the apparent settlement that was leaked despite the federal gag order,” Keith Ellison, Minnesota attorney general, told NBC News. “It may be worth far less than media reports say and seems to be not yet good enough for the magnitude of the death and destruction Purdue and the Sacklers caused.”

“I am now preparing filings to sue the Sackler family,” North Carolina Attorney General Josh Stein said. “Different states have different views … but every Attorney General agrees that Purdue, the Sacklers and other drug companies need to pay to treat those struggling with addiction.”

According to Business Insider, the Sackler family is one of the richest families in the U.S., with an estimated net worth of $13 billion. Their vast sums of money came from the sales of Oxycontin, which went on the market in 1996. Since its introduction and through 2017, the painkiller has generated more than $35 billion in revenue for the company, as stated in an article by The New Yorker.

According to a report by the Centers for Disease Control and Prevention, 47,600 drug overdose deaths in 2017 involved opioids, with increases across racial and ethnic groups, age groups, county urbanization levels and in multiple states. The report also noted that from 2016 to 2017, synthetic opioid-involved overdose death rates increased by 45 percent.