New York (CNN Business)Purdue Pharma has filed a restructuring plan to dissolve itself and establish a new company dedicated to programs designed to combat the opioid crisis, according to court documents filed Monday.
As part of the proposed plan, the Sackler family has agreed to pay an additional $4.2 billion over the next nine years to resolve various civil claims.
“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,” the Sackler family said in a statement.
The company, which makes OxyContin, called the plan “unprecedented in scope and nature” in a press release.
“The vast majority of the Debtors’ assets will be dedicated to programs to abate the opioid crisis. Billions of dollars will flow into trusts established for the benefit of states and localities, as well as other creditor groups such as Native American Tribes, hospitals, and children with a history of Neonatal Abstinence Syndrome and their guardians. Each trust will require that the funds be dedicated exclusively to opioid abatement efforts, and there will be transparency to so ensure,” court documents state.
But attorneys general across the country objected to the settlement. In a joint statement, they called Purdue a “criminal enterprise” and demanded the company admit to its role in creating the crisis.
“It falls short of the accountability that families and survivors deserve,” the statement said.
BREAKING: "Right now, millions of people across the country are desperately suffering from opioid addiction. They need help and they need it now."
Read Attorney General @JoshStein_'s & 23 AGs' reaction to the plan Purdue Pharma filed in bankruptcy court: https://t.co/UHVtEQpRKX pic.twitter.com/sdaiWxS0s5
The restructuring plan is over 300 pages long. It details how the embattled pharmaceutical company plans to transfer billions of dollars and operating assets into a newly-formed company, whose stated mission is to address the country’s opioid crisis.
Purdue Pharma said in a press release that state and local governments will neither own, nor operate the new company and that more than $10 billion will be designated to “providing, at cost, millions of doses of potentially lifesaving opioid addiction treatment and overdose reversal medicines.”
Purdue Pharma’s plan will also distribute funds through two newly-established national opioid abatement trusts: the National Opioid Abatement Trust (the “NOAT”) and the Tribe Trust, which will be dedicated to resolving claims from Native American tribes.
“All value distributed to NOAT and the Tribe Trust will be exclusively dedicated to programs designed to abate the opioid crisis and for no other purpose (other than to fund administration of the programs themselves and to pay fees and costs). The Debtors believe that funding these dedicated abatement funds, while allocating significant value for distribution to holders of PI Claims, is in the best interest of creditors and of the American public,” court documents state.
A hearing to approve the plan is scheduled for April 21.
Oxycontin is among the most abused prescription drugs of all time, linking the pharmacy company to the opioid epidemic raging through the country. According to the Centers for Disease Control, 450,000 people died in the United States in the 10 years starting in 1999 from overdoses involving opioids, including prescription and illicit drugs. And about a third of those deaths in 2018 involved prescription opioids.
Purdue had allegedly paid doctors to write more opioid prescriptions, according to the three federal criminal charges the company pleaded guilty to in November. Purdue was to pay more than $8 billion and agreed to close down the company.
The company didn’t have $8 billion in cash, so Purdue agreed to dissolve itsefl and use its assets to create a new “public benefit company” controlled by a trust or similar entity designed for the benefit of the American public. The plan was swiftly criticized by dozens of state attorneys general.
The Sackler family has made a fortune off of the sales of Oxycontin. In October, the family paid $225 million in damages, but did not take responsibility for the opioid crisis.
The Sackler’s have already paid $225 million under an initial settlement framework to satisfy their civil settlement with the US Department of Justice and persons associated with the Sackler entities have agreed to be “prohibited from engaging in the manufacturing or sale of opioids, subject to exceptions to be agreed,” court documents state.
— CNN’s Chris Isidore contributed to this report.
Source: Read Full Article