Sacklers Ready to Give Up Ownership of Purdue Pharma in Settlement

Sacklers Ready to Give Up Ownership of Purdue Pharma in Settlement

Purdue Pharma, the maker of Oxycontin, one of the drugs at the center of an opioid addiction epidemic in the United States that has claimed more than four hundred thousand lives since 1999, has proposed to pay between $10 billion and $12 billion to settle all claims against it for its role in the public health crisis, Reuters reports.

Purdue and the Sackler family, which owns the company and is known for its deep-pocketed philanthropy, reportedly have been in discussions for months with state attorneys general and other plaintiffs to reach a solution. Under terms of the settlement, members of the family would give up ownership of the company and pay $3 billion of their own money to resolve thousands of federal and state lawsuits, the New York Times reports. The family also would sell another pharmaceutical company it owns, Mundipharma, and contribute $1.5 billion from the proceeds of that sale to settle claims. The bulk of the funds paid by Purdue would come from a Chapter 11 restructuring of the company that would transform Purdue from the second largest privately held company in the country to a "public beneficiary trust" for at least a decade, allowing all profits from its drug sales to go to plaintiffs — primarily states, cities and towns, and Native American tribes. In addition, the company would give the addiction treatment drugs it is developing and that have received fast-track review status from the Food and Drug Administration to the public at no charge; the estimated value of the foregone profits and drug donations is between $7 billion and $8 billion.

According to the Times, at least ten states are involved in negotiations with the family and company, but it is unclear whether the other states that have filed lawsuits — at least thirty-eight — will agree to the proposal. Also unclear is whether a group of thirty-four thousand cities and counties that have not yet filed lawsuits will agree to be bound by the settlement framework. If an agreement can be reached, Purdue would immediately file for bankruptcy and be placed under the supervision of a bankruptcy judge, who would then appoint three independent trustees who would be responsible for naming a board of directors for the beneficiary trust.

In a statement to NBC News, which broke the story, the company said, "While Purdue Pharma is prepared to defend itself vigorously in the opioid litigation, the company has made clear that it sees little good coming from years of wasteful litigation and appeals."

According to the Times, the framework for the agreement and the identity of which plaintiffs are leaning toward signing it remains in flux. Participants were scheduled to give a status report to Judge Dan Polster, who is overseeing the thousands of lawsuits filed by local governments against the drug maker, on Friday. Polster has ordered all participants not to speak to anyone outside the negotiations about their content.

In a statement to the Times, the executive committee for the plaintiffs said, "Per Judge Polster's confidentiality order that we will respect, we cannot speak publicly to any speculation or media reports on settlement negotiations with the defendants we are preparing to litigate against in federal court this fall."