OxyContin maker Purdue Pharma exploring bankruptcy
Filing for Chapter 11 protection would halt the thousands of lawsuits alleging the drug manufacturer used deceptive practices to push addictive drugs that led to fatal overdoses.
OxyContin pills at a pharmacy in Montpelier, Vermont in 2013.Toby Talbot / AP file
March 4, 2019, 3:57 PM UTC / Updated March 4, 2019, 8:46 PM UTC / Source: Reuters
By Reuters and Laura Strickler
OxyContin maker Purdue Pharma is exploring filing for bankruptcy as one of its options to address potentially significant liabilities from thousands of lawsuits alleging the drug maker contributed to the deadly opioid crisis sweeping the U.S., a source familiar with the matter confirmed to NBC News Monday.
The possible bankruptcy filing was first reported by Reuters.
The deliberations show how Purdue and its wealthy owners, the Sackler family, are under pressure to respond to mounting litigation accusing the pharmaceutical company of misleading doctors and patients about risks associated with prolonged use of its prescription opioids.
As of 2019, no members of the Sackler family are on the Purdue board of directors, said a source familiar with the matter, although the family still owns the company.
Purdue denies the allegations, arguing that the U.S. Food and Drug Administration-approved labels for its opioids carried warnings about the risk of abuse and misuse associated with the drugs.
Filing for Chapter 11 protection would halt the lawsuits and allow the drug maker to negotiate legal claims with plaintiffs under the supervision of a U.S. bankruptcy judge, the sources said.
More than 1,000 lawsuits accusing Purdue and other opioid manufacturers of using deceptive practices to push addictive drugs that led to fatal overdoses are consolidated in an Ohio federal court. Purdue has held discussions to resolve the litigation with plaintiffs' lawyers who have often compared the cases to widespread lawsuits against the tobacco industry that resulted in a $246 billion settlement in 1998.
A Purdue bankruptcy filing is not certain, the sources said. The Stamford, Connecticut, drug maker has not made any final decisions and could instead continue fighting the lawsuits, they said.
"As a privately held company, it has been Purdue Pharma's longstanding policy not to comment on our financial or legal strategy," Purdue said in a statement.
"We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners."
Purdue faces a May trial in a case brought by Oklahoma's attorney general that, like others, accuses the company of contributing to a wave of fatal overdoses by flooding the market with highly addictive opioids while falsely claiming the drugs were safe. The court proceedings will be televised.
Purdue tapped law firm Davis Polk & Wardwell for restructuring advice, Reuters reported in August, fueling concerns among litigants including Oklahoma Attorney General Mike Hunter that the company might seek bankruptcy protection before the trial.