Sackler’s relatives who own Purdue Pharma, the drug company blamed for fueling the U.S. opioid crisis, have increased the amount of cash they would contribute to a potential bankruptcy settlement to $ 4.3 billion in a bid states to win who declined the deal.
In bankruptcy court, members of the billionaire philanthropist family pledged an additional $ 1.3 billion on top of their 2019 offer, which was rejected by 24 states and the District of Columbia. The funds would be disbursed over a nine-year period.
Purdue filed for Chapter 11 bankruptcy after the creator of OxyContin was hit by thousands of lawsuits from states, towns and cities across the US, which have become primary creditors in every bankruptcy settlement.
The state, tribal and local authorities are seeking funds to address the fallout from the opioid crisis, which has resulted in more than half a million overdose deaths in the US.
The members of the Sackler family who own the maker of the powerful opioid OxyContin will also pledge to end involvement in the pharmaceutical industry as part of the settlement.
“Today marks an important step toward helping people suffering from addiction, and we hope that this proposed resolution will be the start of a far-reaching effort to provide assistance where it is needed,” said members of the Raymond and families. Mortimer Sackler. in a statement.
$ 1.3 billion
the additional money provided by Sackler family members for a Purdue Pharma bankruptcy settlement worth an estimated $ 10 billion
Purdue Pharma estimates that the total value of the settlement is worth about $ 10 billion, but that could be disputed as it includes estimated proceeds from the sale of drugs that have not yet been approved.
Even after increasing their own cash contribution, the total creditors total would not exceed the previous offer, which the company also estimated at about $ 10 billion.
But that proposal included $ 1.5 billion from the sale of Mundipharma, an international pharmaceutical company also owned by members of the Sackler family, which has not yet been sold, and which added more value to Purdue itself.
In a statement, the company said it believed there was “wide and strong support” for the plan, including from some public attorneys general, as well as other government and private creditors.
Last year, the company agreed to a criminal and civil settlement with the US Department of Justice, admitting that it “knowingly and intentionally conspired and agreed with others to help and assist physicians in dispensing medication” without a legitimate medical target “.
That settlement was potentially worth more than $ 8.3 billion. But Purdue can spend $ 1.8 billion of that amount on the alleged bankruptcy deal, rather than the federal government, as long as it’s spent on public health programs designed to ease the opioid crisis.
In that October settlement, members of the Sackler family agreed to pay $ 225 million but denied any wrongdoing.
Since the original bankruptcy proposal in September 2019, some attorneys general have named the family members, not just Purdue, in their suits, with the New York AG claiming they have withdrawn more than $ 10 billion from the company.
A lawyer for the Raymond Sackler branch of the family said at the time that more than half of the money had been paid in taxes or reinvested in the businesses that will be sold as part of the bankruptcy settlement.
The bankruptcy plan, due to be heard in court in August, includes the formation of a new company with the assets and drug development pipeline of Purdue Pharma.
The new company would sell drugs to mitigate the effects of the epidemic, such as buprenorphine naloxone, which treats opioid addiction. But the other drugs, a nasal spray and an injectable overdose, are at an earlier stage of development, so it’s hard to tell if they’ll be worth the $ 4 billion the company predicts.
Under the plan, the company will give money to organizations, including a new National Opioid Abatement Trust, which would distribute it among programs hoping to dampen the crisis, and other funds, including one for personal injury claims.
It would initially bring in $ 500 million and later distribute approximately $ 1 billion generated from assets and activities before 2024.
The company argued that the bankruptcy settlement is the best solution, in part because there have been no offers to buy Purdue Pharma.
Purdue lawyers said it had received one expression of interest, but not a standing offer. It added that the pipeline of other drugs is in the early stages and is unlikely to be properly valued by a buyer, noting that the revenue stream associated with its opioid painkiller business is likely to be “heavy.” would be discounted by potential buyers ”.