Sources say Purdue Pharma offering up to $12 billion to settle opioid cases: report

According to two people familiar with the matter, Purdue Pharma and its owners are prepared to offer $10 billion to $12 billion to settle more than 2000 lawsuits accusing the company of at least partially fuelling the US opioid crisis, NBC News reported Tuesday. The sources indicated that the potential deal was discussed at a meeting between Purdue attorneys and at least 10 state attorneys general last week. 

At the meeting, Purdue is said to have offered a plan to declare bankruptcy and then restructure its operations into a for-profit "public benefit trust," NBC News reported, citing a summary term sheet as well as another source. Under the potential deal, three "well-recognised expert" trustees independently chosen by a bankruptcy court would be responsible for selecting a board of directors to run the trust, which would exist for at least 10 years. Meanwhile, the Purdue-owning Sackler family would relinquish ownership of the company and would no longer be involved, two sources said. 

In addition, Purdue lawyers indicated that the value of the trust would include more than $4 billion worth of in-kind drugs, including medicines to reverse overdoses, that would be supplied to cities, counties and states, people familiar with the matter said. Profits from the sale of Purdue products such as OxyContin (oxycodone) or nalmefene, which the FDA has fast-tracked for the emergency treatment of opioid overdoses, would also be provided to cities, counties and states if they agreed to the terms. 

The deal would amount to a settlement of $7 billion to $8 billion for Purdue, according to two people familiar with the offer. Meanwhile, one source said members of the Sackler family would for their part contribute at least $3 billion to the total, which would be obtained by selling off Mundipharma, a separate pharmaceutical company they own. An additional $1.5 billion may be tacked onto the $3 billion if the sale of Mundipharma exceeds $3 billion.

In a statement, Purdue said that while it 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." The drugmaker added that "a constructive global resolution is the best path forward, and [we are] actively working with the state attorneys general and other plaintiffs to achieve this outcome." However, Paul Hanly, a lead attorney for cities and counties in the opioid litigation, called the NBC News report "made up" and "ridiculous."

In March, sources suggested that Purdue could consider a bankruptcy filing to manage increasing liabilities due to opioid lawsuits. The company later agreed to pay approximately $270 million to resolve an Oklahoma lawsuit accusing it of aggressively marketing OxyContin. The latest speculation comes one day after a judge in the Oklahoma case ordered Johnson & Johnson to pay $572 million for deceptively marketing opioids in the state. 

For related analysis, see ViewPoints: Johnson & Johnson's loss in opioid case seen as win for industry. See also ViewPoints: Opioid makers on hot seat chart very different courses.  

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