Purdue Pharma, accused of fostering the US opioid crisis with its drug OxyContin, filed for bankruptcy protection in a New York court, after a tentative settlement deal faced opposition from multiple states.
The company filed for chapter 11 bankruptcy in White Plains, New York, on Sunday evening, as part of its efforts to finalize a settlement with state and local governments that sued the pharmaceutical giant en mass for its role in the nation’s deadly opioid crisis.
The much-anticipated filing is aimed at helping the company to shield itself from some 2,600 lawsuits, including from 26 states.
“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation,” Steve Miller, chairman of Purdue’s board of directors, said, adding that the company would keep on working with plaintiff representatives to thrash out the settlement agreement “as quickly as possible.”
The numerous plaintiffs accused the company of making huge profits from selling the painkiller, first introduced in 1996, while downplaying its addictive qualities, thus fueling the US opioid crisis, that saw over 200,000 people dying as result of overdoses with prescription drugs from 1999 to 2017.
The bankruptcy announcement comes several days after the Sackler family behind the controversial drugmaker reached a tentative multi-billion settlement with 23 states, that envisages it paying the sum over seven years while not admitting its guilt.