Purdue Is Largely Blamed for the Opioid Crisis. Now It Might File for Bankruptcy09/09/2019
Settlement talks between state lawmakers and Purdue Pharmaceuticals, a company implicated in the nationwide opioid crisis, have failed, leaving Purdue little choice but to file for bankruptcy, according to a recent email from two state attorneys general involved in the discussions. According to reports, part of the reason for the failure stems from the Sackler family’s refusal to surrender $4.5 billion of their personal wealth as part of a settlement to compensate for the role the family played in perpetuating the opioid crisis.
On Saturday, Herbert Slatery and Josh Stein, attorneys general for the states of Tennessee and North Carolina, respectively — which have filed suit against the Stamford, Connecticut-based pharmaceutical company and the Sackler family — said that the family had rejected two offers for a settlement without offering any counterproposals. In addition to requiring the Sackler family to relinquish a great deal of its personal wealth, the settlement would have required Purdue to cease its offshore operations.
As a result, Slatery and Stein wrote in an email to the attorneys general in at least 17 other states suing Purdue, the company is expected to file for bankruptcy “imminently” and “states have already begun preparations for handling the bankruptcy proceedings.”
The company has denied reports that negotiations have broken down, saying in a statement on Sunday that “negotiations continue and we remain dedicated to a resolution that genuinely advances the public interest.”
Over the past few months, Purdue Pharma has been engaged in intense negotiations with state and local lawmakers. In total, nearly 2,000 lawsuits have been filed against the company, alleging that it was aware of the risks of opioid use while continuing to market its products and furnish its coffers. Many of these lawsuits have specifically named the Sackler family, the owner of Purdue Pharmaceuticals, which is estimated to be worth about $13 billion.
Although it was reported last month that Purdue and the Sackler family had offered to settle the lawsuits for an estimated $10 to $12 billion, negotiations reportedly stalled because the company could not come to an agreement regarding how to divvy up the money between the plaintiffs.
In light of the recent barrage of lawsuits, the company has been the focus of intense speculation that it may file for bankruptcy, with initial reports to this effect first circulating back in March. At the time, a Purdue spokesperson declined to comment to Rolling Stone as to whether or not it was planning to file for bankruptcy, with a spokesperson for the company saying, “It has been Purdue Pharma’s longstanding policy not to comment on our financial or legal strategy. We are, however, committed to ensuring that our business remains strong and sustainable.” Purdue Pharma did not return a request for comment from Rolling Stone regarding current reports of stalled negotiations.
Should the company file for bankruptcy, the plaintiffs in the thousands of lawsuits would have to battle against the company in bankruptcy court. It would also likely cause the estimated value of the company to plummet, thereby reducing any potential monetary awards given to the plaintiffs.
According to the Centers for Disease Control, the opioid crisis has affected hundreds of thousands of Americans, with 130 people dying of opioid overdoses every day. Deaths from prescription opioids like OxyContin have played a large role in contributing to the trend, with the rate of fatal prescription opioid overdose increasing five times between 1999 and 2017.
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