According to internal documents as well as a person familiar with the matter, drugmakers could participate in Purdue Pharma's recently announced bankruptcy as part of efforts to resolve thousands of opioid-related lawsuits across the US, The Wall Street Journal reported Monday. The person noted that five companies, namely Allergan, Endo International, Johnson & Johnson, Mallinckrodt and Teva, are seeking to reach a global settlement of the cases through the bankruptcy proceedings.
The news comes after Purdue reached a tentative agreement earlier this month to pay between $10 billion and $12 billion to settle litigation filed by more than 20 states and thousands of local governments accusing the company of helping to fuel the opioid crisis. Several states, including Massachusetts and New York, have expressed opposition to the settlement terms.
Under the proposed idea, the drugmakers would contribute funds into a trust set up through the bankruptcy in exchange for a complete release from liability. The source cautioned that the idea remains in early stages and that no settlement amount has been discussed.
Any such move would require approval from Purdue and its controlling Sackler family as well as a critical mass of local and state governments participating in the litigation. In addition, presiding US District Judge Dan Polster, who has previously urged the groups to reach a settlement ahead of the trials, would also need to authorise the agreement.
The speculation follows a report that drugmakers including Allergan, Endo and Johnson & Johnson were exploring ways to settle the lawsuits ahead of trial. Polster later rejected a request by the companies to dismiss the litigation.
Meanwhile, Johnson & Johnson was ordered to pay $572 million by an Oklahoma court after the company was found liable for its role in the opioid crisis in the state (for related analysis, see ViewPoints: Johnson & Johnson's loss in opioid case seen as win for industry). Purdue and Teva separately entered into settlements with the state ahead of the trial.
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