Purdue Pharma in discussion on $10 billion-$12 billion offer to settle opioid claims - sources

 Purdue Pharma in discussion on  billion- billion offer to settle opioid claims - sources

By Mike Spector and Jessica DiNapoli

(Reuters) - OxyContin maker Purdue Pharma LP and its owners, the Sackler family, are in discussion to settle more than 2,000 lawsuits against the company for $10 billion to $12 billion, two people familiar with the matter said on Tuesday.

Purdue is among several drugmakers and distributors that have been sued seeking to hold them responsible for fuelling an opioid addiction crisis in the United States, which claimed 400,000 lives from 1999 to 2017, according to the U.S. Centres for Disease Control and Prevention.

The lawsuits have accused the Stamford, Connecticut-based Purdue Pharma of aggressively marketing prescription opioids while misleading prescribers and consumers about risks from their prolonged use. Purdue and the Sacklers have denied the allegations.

Purdue said it was actively working with state attorneys general and other plaintiffs to reach a resolution, without specifying a settlement amount.

Representatives for Purdue and the Sackler family held discussions with cities, counties and states on the contours of the potential multibillion-dollar settlement last week in Cleveland, said a person familiar with the matter.

During the meeting, Purdue outlined a plan to file for Chapter 11 bankruptcy protection as a mechanism for implementing the settlement, which the company hopes will address the lawsuits, the person said.

There is currently no agreement and the settlement discussions could collapse, the sources said.

The company has said the U.S. Food and Drug Administration approved labels for OxyContin carrying warnings about risk and abuse associated with treating pain. The Sacklers have argued they were passive board members who approved routine management requests rather than micromanaging the marketing of OxyContin.

RESTRUCTURING

The settlement offer was first reported by NBC. Paul Hanly, a lead attorney for the plaintiffs, in an e-mail called that report “made up” and “ridiculous.” He did not respond to further requests for comment regarding Reuters’ reporting.

Representatives for the Sackler family declined to comment and a representative for the state attorneys general did not immediately respond to a request for comment.

The plan under discussion envisions Purdue restructuring into a for-profit "public benefit trust" that would include value from drugs provided to cities, counties and states the person said. Some of the drugs are used to combat opioid overdoses, one of the sources said.

Purdue would contribute between $7 billion and $8 billion, with the value coming from the combination of the in-kind drugs and profits from sales of them, the person said. The Sackler family, which would give up ownership of Purdue under the deal being discussed, would contribute at least $3 billion, this person said.

The Sackler family, which has amassed an estimated $13 billion fortune over the years, is also weighing a possible sale of another pharmaceutical firm it owns called Mundipharma, with some of the proceeds potentially going toward the settlement under discussion, the person said.

David Sackler, one of a handful of family members who previously sat on Purdue's board, was present for the discussions in the meeting last week, which included at least 10 state attorneys general, the person said.

Purdue for months has been preparing a potential Chapter 11 filing to attempt to halt the lawsuits against it and negotiate a settlement under the supervision of a U.S. bankruptcy judge, said people familiar with the preparations.

Purdue has been attempting to reach an agreement with a number of plaintiffs before filing for bankruptcy protection in the hopes of presenting the outlines of a settlement in court and then completing negotiations, the people said.

The company has also been preparing for the prospect of filing for bankruptcy without any agreement with plaintiffs and using Chapter 11 proceedings to continue negotiations, the people said.

About 2,500 lawsuits, most by local governments across the United States, have sought to hold drugmakers and distributors liable for the crisis. Most of those cases have been consolidated before a federal judge in Cleveland.

On Monday, an Oklahoma judge ordered Johnson & Johnson to pay $572.1 million to the state for deceptively marketing addictive painkillers following the first trial related to the addiction crisis.

Purdue reached a settlement in March for $270 million to resolve a similar lawsuit by the state of Oklahoma.

(Reporting by Jessica DiNapoli and Mike Spector in New York; Ankit Ajmera in Bengaluru; Writing by Tom Hals; Editing by Grant McCool)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Aug 28, 2019 03:06:51 IST