Oct 21, 2020
Purdue Pharma to Pay $8 Billion to Settle U.S. Opioid Probe
, Bloomberg News
(Bloomberg) -- Purdue Pharma LP has agreed to an $8 billion settlement with the U.S. Justice Department to resolve federal probes of how it marketed OxyContin, the addictive painkiller blamed for helping to spark the opioid epidemic, according to a person familiar with the matter.
The Justice Department is expected to hold a morning press conference to announce resolution of the investigations, according to the person, who wasn’t authorized to comment publicly on the deal.
The settlement is likely to boost Purdue’s effort to move past claims it helped spark a public-health crisis over opioids with its marketing of OxyContin. Yet the company still faces thousands of civil claims by local and state officials, for which Purdue has proposed a separate $10 billion settlement. Governments are seeking reimbursement from Purdue and others for tax dollars spent coping with the crisis, which led to more than 200,000 U.S. overdose deaths and chronic addiction.
To cope with a tidal wave of claims, Purdue last year filed for Chapter 11 protection in bankruptcy court in New York, which must approve the settlement with the Justice Department. U.S. Bankruptcy Judge Robert Drain in White Plains, New York, must approve the settlement for it to become final.
Michele Sharp, a Purdue spokesperson, didn’t immediately return an email Wednesday seeking comment on the upcoming announcement.
In a bankruptcy filing earlier this year, federal prosecutors said they were seeking more than $11 billion in criminal fines and civil penalties from Purdue. The government claims the company fueled the opioid epidemic with illegal OxyContin marketing efforts.In bankruptcy court, Purdue has proposed a $10 billion deal calling for the Sacklers to hand over the company to a trust controlled by the states, cities and counties that are suing it. As part of that proposal, the Sacklers would contribued $3 billion themselves.Numerous state attorneys general, led by Massachusetts Attorney General Maura Healey and New York Attorney General Letitia James, oppose the Sackler’s bankruptcy offer. They want the family to dig into their own pockets for additional billions.
The Purdue bankruptcy case is In RE Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court, Southern District of New York (White Plains).
(Updates with more background on the case.)
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