Associated Press
- Oxycontin producer Purdue Pharma is in talks to resolve more than 2,000 opioid lawsuits in a $10 billion to $12 billion settlement, according to a Wall Street Journal report.
- If approved, the deal would bankrupt Purdue and form a public trust company to pay off governments bringing the lawsuits.
- The Sackler family - which has owned the company since 1950 - would give up their ownership in the reorganization.
- The talks follow an Oklahoma judge's ruling against Johnson & Johnson in a similar case.
- Though J&J was only ordered to pay 3% of the state's requested damages, the ruling opens the door for similar cases against opioid producers and distributors.
- Visit the Markets Insider homepage for more stories.
Purdue Pharma is in talks to resolve more than 2,000 opioid crisis lawsuits in a deal that would bankrupt the company, according to The Wall Street Journal.
The Oxycontin producer is discussing a $10 billion to $12 billion settlement deal with state and local governments to resolve the cases. A collection of cities, counties, tribal lands, and communities filed cases against Purdue Pharma, accusing it of sustaining the US opioid epidemic.
The proposal would place Purdue in bankruptcy and transform it into a public trust. The Sackler family - which has owned the company since 1950 and came under fire for their role in the national drug crisis - would lose control of the company. Proceeds from the trust would pay governments behind the lawsuits, WSJ reported.
The settlement discussions come before the trial's October start date. The company faces a Friday deadline to update US District Judge Dan Polster on whether it will come to a deal. Purdue already settled a similar lawsuit in Oklahoma state court for $270 million before the case reached trail.
The news followed an Oklahoma judge ruling against Johnson & Johnson in a state case focused on the opioid crisis. Though J&J was ordered to pay about 3% of the state's requested damages, the ruling set a new legal precedent that could affect other opioid-related lawsuits throughout the US.
A handful of opioid producers and distributors have already been affected by increased legal scrutiny in recent months. Teva Pharmaceutical Industries settled with an Oklahoma judge for $85 million in June. Opioid distributors McKesson, Cardinal Health, and AmerisourceBergen all fell as much as 7% in early August trading after Bloomberg reported their $10 billion settlement offer was met with a $45 billion counter from the National Association of Attorneys General.
The lawsuits against Purdue accuse the company of using misleading marketing to push its Oxycontin painkiller. The pharma giant has sold more than $35 billion of the opioid since it hit the market in 1996.
Now read more markets coverage from Markets Insider and Business Insider:
Peloton's margins on its $2,000 bikes and treadmills are better than Apple's legendary margins