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article imagePurdue Pharma considers bankruptcy over OxyContin lawsuits

By Karen Graham     Mar 14, 2019 in Business
Purdue Pharma and a number of other drug manufacturers are facing thousands of lawsuits related to allegations that they contributed to the opioid crisis through bad marketing practices. Purdue is considering bankruptcy.
Purdue Pharma is a privately held pharmaceutical company owned by the descendants of Mortimer and Raymond Sackler. The company makes pain medicines such as hydromorphone, oxycodone, fentanyl, codeine, and hydrocodone. It is widely known for the production of drugs such as MS Contin, Oxycontin, and Ryzolt.
The Sackler family is well-known for their generous donations to museums around the world, including the Smithsonian Institution in Washington, New York City's Metropolitan Museum of Art and London's Tate Modern. Of course, they can afford it, too. A court filing in Massachusetts earlier this year shows that the family was paid more than $4 billion from Purdue from 2007 to 2018.
And without a doubt, the company has made wheelbarrow loads of money off its pain medications, even while dodging complaints from state officials like Connecticut Attorney General Richard Blumenthal, who in 2001 issued a statement urging Purdue to take action regarding the abuse of Oxycontin.
While little or nothing was done to address Connecticut's request, in 2004, the West Virginia Attorney General sued Purdue for reimbursement of "excessive prescription costs" paid by the state. Purdue was charged with deceptive marketing because patients ended up taking more of the drug than necessary because its effects wore off too soon.
More recently, Perdue Pharma agreed to pay $600 million in an out-of-court settlement. Three company executives including the CEO of Purdue were also in court and agreed to separately pay another $34.5 Million in penalties.
"Purdue ... acknowledged that it illegally marketed and promoted OxyContin by falsely claiming that OxyContin was less addictive, less subject to abuse and diversion, and less likely to cause withdrawal symptoms than other pain medications - all in an effort to maximize its profits," said U.S. Attorney John Brownlee.
Oxycodone is a semi-synthetic opioid synthesized from poppy-derived thebaine. It is a narcotic analg...
Oxycodone is a semi-synthetic opioid synthesized from poppy-derived thebaine. It is a narcotic analgesic generally indicated for relief of moderate to severe pain
Litigating the opioid crisis
With close to 2,000 lawsuits pending today, Purdue Pharma and a number of other pharmaceutical companies are facing a substantial financial impact that could amount to hundreds of millions of dollars. The same thing happened in 1982 over asbestos litigation, in 1985 over flawed intrauterine devices and in 2017 over defective Takata airbags, reports Salon.
But talking about financial impacts - The onset of the epidemic of opioid-related deaths started about 20 years ago, 400,000 people have died from opioid overdoses, at an estimated cost of $1 trillion.
While it has not been made final, Purdue is thinking about avoiding litigation by filing for Chapter 11 bankruptcy protection, according to CBC Canada. Generally, once a company files for bankruptcy the lawsuits are put on hold and a federal bankruptcy judge would have wide discretion on how to proceed.
Hydrocodone-paracetamol 5-500 tablets.
Hydrocodone-paracetamol 5-500 tablets.
The judge has a choice of allowing the claims against other drug makers and distributors to move ahead while Purdue is handled separately, consolidate all of them or let the other claims continue without Purdue involved. One other possibility would be to have the bankruptcy filing include a settlement with plaintiffs in the suits.
To be fair, Perdue Pharma is not the only company that has sold opioids, but they are taking a lot of the blame because they developed the drug and invented the mass marketing strategy that made OxyContin so profitable for the company.
More about Purdue Pharma, Oxycontin, Lawsuits, prescription painkiller, Litigation
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