As part of the proposed plan, the Sackler family has agreed to pay an additional $ 4.2 billion over the next nine years to resolve various civil claims.
The vast majority of the debtors’ assets will be spent on programs to mitigate the opioid crisis. Billions of dollars will flow into trusts established on behalf of states and localities, as well as other creditor groups such as Native American Tribes, hospitals, and children. with a history of neonatal withdrawal syndrome and their guardians. Each trust requires that the funds be spent solely on efforts to reduce opioids, and there will be transparency to ensure this, “court documents said.
But attorneys general across the country objected to the settlement. In a joint statement, they called Purdue a “criminal enterprise” and demanded that the company admit its role in creating the crisis.
“It falls short of the accountability that families and survivors deserve,” the statement said.
The restructuring plan is more than 300 pages long. It details how the controversial pharmaceutical company plans to transfer billions of dollars and assets to a newly formed company whose stated mission is to address the country’s opioid crisis.
Purdue Pharma said in a press release that state and local governments will not own or operate the new company and that more than $ 10 billion will be allocated to “ provide millions of doses of potentially life-saving opioid addiction treatment and overdose reversal at cost. ” . “
Purdue Pharma’s plan will also distribute funds through two newly created national opioid reduction trusts: the National Opioid Abatement Trust (the “NOAT”) and the Tribe Trust, which will focus on resolving claims from Native American tribes.
“Any value distributed to NOAT and the Tribe Trust will be spent solely on programs designed to mitigate the opioid crisis and for no other purpose (other than to self-fund the management of the programs and to fund fees and costs. While these special prevention funds attribute significant value for distribution to PI Claims holders, it is in the best interests of creditors and the US public, “court documents said.
A hearing to approve the plan is scheduled for April 21.
Oxycontin is one of the most abused prescription drugs of all time, connecting the pharmacy business to the opioid epidemic raging across the country. According to the Centers for Disease Control, 450,000 people in the United States died from opioid overdoses in the 10 years from 1999, including prescription and illicit drugs. And about a third of those deaths in 2018 were prescription opioids.
The company did not have $ 8 billion in cash, so Purdue agreed to dissolve it and use its assets to create a new “public utility” controlled by a trust or similar entity designed for the benefit of the American public. The plan was quickly criticized by dozens of attorneys general.
The Sackler family made a fortune selling Oxycontin. In October, the family paid $ 225 million in damages but took no responsibility for the opioid crisis.
The Sackler’s have already paid $ 225 million under an initial settlement framework to comply with their civil settlement with the United States Department of Justice and individuals associated with the Sackler entities have agreed to “ engage in the production or sale of opioids , subject to exceptions to be agreed, “states in court documents.