Purdue bankruptcy filing expected "imminently" as opioid settlement talks stall: report

Purdue Pharma is expected to file for bankruptcy after negotiations to settle some 2000 lawsuits accusing the drugmaker, among others, of fuelling the US opioid crisis appear to have hit a deadlock, according to attorneys general involved in the talks. An email from Tennessee Attorney General Herbert Slatery and North Carolina Attorney General Josh Stein said that Purdue and the Sackler family, which owns the OxyContin maker, rejected two offers from the states over how payments under any settlement would be handled, while the family would not make any counteroffers.

"As a result, the negotiations are at an impasse, and we expect Purdue to file for bankruptcy protection imminently," Slatery and Stein wrote in their email, which was sent to update attorneys general throughout the US on the status of the negotiations. Meanwhile, Purdue spokeswoman Josephine Martin said the company "declines to comment on that in its entirety."

The stalemate puts the first federal trial over the opioid epidemic on track to begin October 21 in Ohio, potentially now without Purdue. Recent speculation had Purdue and the Sackler family offering as much as $12 billion as part of an agreement to resolve opioid lawsuits across the US. Under an earlier proposal, Purdue would have entered a structured bankruptcy that could be worth $10 billion to $12 billion over time, an amount that would have included $3 billion from the Sacklers, who would in turn relinquish control of the drugmaker. The offer was also said to have included the Sackler family contributing up to $1.5 billion more based on the sale of Mundipharma, another company they own.

However, Pennsylvania Attorney General Josh Shapiro, who was also participating in the settlement talks, said the attorneys general did not believe that what Purdue and the Sacklers were offering would have been worth the reported $10 billion to $12 billion.

In their latest offers, the states also sought more assurances that the $4.5 billion from the Sacklers would actually be paid, but the family has "refused to budge," according to the email from Slatery and Stein. They added that the states have already begun preparations for handling bankruptcy proceedings. "Like you, we plan to continue our work to ensure that the Sacklers, Purdue and other drug companies pay for drug addiction treatment and other remedies to help clean up the mess we allege they created," they wrote.

Meanwhile, Endo, Allergan and most recently Mallinckrodt have separately reached agreements regarding similar claims ahead of the upcoming Ohio trial.

In March, Purdue reached a $270-million settlement with Oklahoma to avoid an opioid trial in that state, where a judge recently ordered Johnson & Johnson to pay $572 million for deceptively marketing opioids (for related analysis, see ViewPoints: Johnson & Johnson's loss in opioid case seen as win for industry).

Earlier this year, sources suggested that Purdue had been considering a potential bankruptcy filing in an effort to manage liabilities related to the opioid lawsuits.

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