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Purdue Pharma, the manufacturer of OxyContin, has proposed a $10 billion strategy to get out of bankruptcy.

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Purdue Pharma, the manufacturer of OxyContin, has proposed a $10 billion strategy to get out of bankruptcy.
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Purdue Pharma, the manufacturer of OxyContin, has proposed a $10 billion strategy to get out of bankruptcy.

Purdue Pharma, the manufacturer of OxyContin, has proposed a $10 billion strategy to get out of bankruptcy.

 

Purdue Pharma, whose drug OxyContin revolutionized the prescription painkiller industry, is offering a $10 billion strategy to emerge from bankruptcy that calls for it to be turned into a new kind of corporation that will funnel profits into the battle against the country’s intractable opioid epidemic.

Members of the Sackler family, who own the Connecticut-based pharmaceutical giant, will contribute more than $4 billion to these efforts.

After months of talks, the corporation filed a plan late Monday night in US Bankruptcy Court in White Plains, New York, to resolve more than 2,900 lawsuits from state and local governments, Native American tribes, hospitals, and other agencies.

In a statement, Steve Miller, chairman of Purdue’s Board of Directors, said, “Purdue has delivered a historic initiative that will have a profoundly positive effect on public health by guiding critically-needed resources to communities and individuals nationally that have been impacted by the opioid epidemic.”

The scheme has the support of the majority of the parties involved in the case. The bid, however, “falls short of the transparency that families and survivors deserve,” according to attorneys general from 23 states and the District of Columbia. They want more money from the Sacklers and for Purdue to wind down in a way that “does not overly entangle it with states.”

The party comprises the majority of Democratic attorneys general around the country, as well as Republican Attorney General Lawrence Wasden of Idaho.

“By triggering a national debacle, the Sacklers became billionaires. In a tweet, Massachusetts Attorney General Maura Healey said, “Now they’re trying to get away with it.” “We will continue to campaign for the transparency that all families in this country deserve.”

The true value of the family’s wealth is unknown. According to a previous court filing, family members received transfers from Purdue ranging from $12 billion to $13 billion over the years, but a lawyer claimed that most of that was used to pay taxes or was reinvested in the business. The two branches of the family that own the business said in letters to the US House Oversight Committee last week that the family members who were board members had net assets of far less — around $1.1 billion.

The majority of Purdue’s proposal is close to what the company announced when it first sought bankruptcy protection a year and a half ago, a move that stopped litigation against both the company and the Sackler family, who will remain immune from legal claims under the plan.

The company said in its proposal that the Sackler family would invest approximately $4.3 billion over a decade, the company would contribute $500 million up front, and revenues would produce another $1 billion by the end of 2024, when the company would be sold or otherwise transformed again. Additional funds will come from insurance claims, according to the study.

Purdue has stated that it would include opioid antidotes and anti-addiction medications worth more than $4 billion.

Two new trusts, one representing state and local government interests and the other representing Native American tribes, would indirectly own the corporation that would replace Purdue. Future revenues will be allocated to government agencies and used to track the wellbeing of children born to mothers who are suffering from opioid withdrawal. Governments will be expected to use their share of the funds for recovery, drug prevention, and other opioid-reduction services.

Over time, victims and their families will receive $700 million to 750 million. For almost 135,000 claims, the total payout will be less than $5,600. Payments for personal injuries are estimated to vary between $3,500 and $48,000.

Parties with allegations against Purdue have until the end of the year to decide whether to approve the revised proposal, which also includes the establishment of a public archive for the company’s records.

Purdue Pharmaceuticals started marketing OxyContin 25 years ago, urging physicians to abandon long-held concerns regarding opioids and concentrate only on relieving patients’ pain. Despite the fact that the drug was being exploited, company executives continued to press for sales, according to court records.

Since 2000, opioids have been related to over 470,000 deaths in the United States, including both prescription and illicit drugs like heroin and fentanyl. For the first time in 2019, the number of opioid-related overdose deaths in the United States surpassed 50,000, and many states recorded a high number of overdose deaths due to all drugs last year.

Thousands of lawsuits have been filed in federal court around the country in an attempt to keep the opioid industry responsible, including thousands of cases supervised by one Cleveland-based judge. When Purdue applied for bankruptcy protection, it was excluded from those and other proceedings.

In California, New York, Ohio, and West Virginia, state and federal trials are set to begin this year.

Purdue has since settled civil lawsuits and pleaded guilty to federal criminal charges. The federal contract with the firm is worth more than $8 billion. However, the US said the company only had to pay $225 million if company assets were used to combat the drug crisis, as the proposal filed Monday appears to do.

Sackler family members decided to pay $225 million to the federal government but acknowledged no wrongdoing in a separate federal agreement revealed at the same time.

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