OxyContin maker Purdue Pharma LP is exploring filing for bankruptcy to address potentially significant liabilities from roughly 2,000 lawsuits alleging the drug manufacturer contributed to the deadly opioid crisis sweeping the United States, people familiar with the matter said on Monday.
The potential move shows how Purdue and its wealthy owners, the Sackler family, are under pressure to respond to mounting litigation accusing the drugmaker of misleading doctors and patients about risks associated with prolonged use of its prescription opioids.
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 pain treatments.
Filing for Chapter 11 protection would halt the lawsuits and allow Purdue to negotiate legal claims with plaintiffs under the supervision of a U.S. bankruptcy judge, the sources said.
Shares of Endo International PLC and Insys Therapeutics Inc, two companies that like Purdue have been named in lawsuits related to the U.S. opioid epidemic, were down more than 12 percent and more than 5 percent, respectively, on Monday morning.
More than 1,600 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.
BANKRUPTCY FILING NOT CERTAIN
A Purdue bankruptcy filing is not certain, the sources said. The Stamford, Connecticut-based company 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.”