Purdue Pharma bankruptcy restructuring requires Sacklers to cede company control

Purdue Pharma submitted a bankruptcy restructuring plan March 15 that requires members of the Sackler family to give up control of the company and transforms the Oxycontin-maker into a corporation with revenue directed toward easing the opioid epidemic, The New York Times reported. 

The plan, more than 300 pages long, includes a pledge of $4.275 billion from the Sackler family, $1 billion more than its previous offer, according to the Times. That money would reimburse states, municipalities, tribes and other plaintiffs for costs associated with the opioid epidemic. 

"With drug overdoses still at record levels, it is past time to put Purdue’s assets to work addressing the crisis," Steve Miller, chairman of Purdue Pharma's board of directors, said in a statement to the Times. "We are confident this plan achieves that critical goal."

Under the plan, Purdue Pharma would pay about $500 million in cash up front to settle hundreds of thousands of injury claims and make more payments over the next decade, according to NPR.

But 24 states and the District of Columbia oppose the plan, issuing a joint statement demanding more money from the company to help communities affected by the opioid crisis, NPR reported. 

The Sackler family, which founded and owns Purdue Pharma, would admit no wrongdoing under the plan and would also retain control of its overseas subsidiaries for at least seven years. The plan wouldn't release the family from criminal investigations, but does release it from further civil litigation, the Times reported. 

Purdue Pharma has acknowledged lying to physicians and patients about the safety of Oxycontin, which became one of the most widely abused prescription narcotics in the U.S., according to NPR

Purdue Pharma would be transformed under the plan into a private corporation run by independent managers selected by the states and local governments that sued the drugmaker. The company would still sell Oxycontin, but would also make generics and a drug to treat attention deficit hyperactivity disorder, the Times reported. It would also make drugs, such as buprenorphine and naloxone, to treat opioid addiction. 

The plan has to be approved by the majority of Purdue Pharma's creditors as well as Judge Robert Drain of federal bankruptcy court in White Plains, N.Y., according to the Times. A conclusion is expected in a few months.

"Today marks an important step toward providing help to those who suffer from addiction, and we hope this proposed resolution will signal the beginning of a far-reaching effort to deliver assistance where it is needed," a spokesperson for the Sackler family said in a statement to Becker's

Editor's note: This article was updated March 16 at 3 p.m. CT to include a statement from the Sackler family. 

More articles on opioids:
Cincinnati surgeon sentenced to 3 years in prison for illegal opioid distribution
2 physicians charged in opioid scheme tied to 6 overdose deaths
9 stats that show opioid misuse is climbing during the pandemic

© Copyright ASC COMMUNICATIONS 2021. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.