Mallinckrodt, the largest generic opioid maker in the U.S., announced this week in a press release that they had reached an agreement to pay $1.6 billion with attorneys general from 47 states and territories for their role in the opioid epidemic. Prosecutors claimed that the company sold more opioids in the country than any other manufacturer during the peak of the crisis. The company released the following statement:
“This court-supervised process is expected to lead to the creation of a trust which, among other things, would establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse.”
The deal will, in essence, settle thousands of lawsuits brought forth by both state and local governments. The money is to be paid into a cash trust for eight years and will be used to underwrite costs related to opioid addiction programs and related efforts nationwide.
Attorney General Xavier Becerra of California:
“Nothing can undo the devastating loss and grief inflicted by the opioid epidemic upon victims and their families, but this settlement with Mallinckrodt is an important step in the process of healing our communities. Our office has worked aggressively to hold accountable bad actors who fueled this public health crisis.”
Under the agreement’s terms, the U.S. division of Mallinckrodt that manufactures generic opioids would file for Chapter 11 bankruptcy. After a judge approves the restructuring plan, an initial payment of $300 million would be distributed to plaintiffs to mitigate the current opioid epidemic, with the remaining $1.3 billion to be disbursed over the next eight years.
The company’s primary subsidiaries, including Specialty Generics, will file for Chapter 11, and the proposed settlement will then become effective upon its emergence from bankruptcy.
Of note, the company has other divisions headquartered overseas that will not file for bankruptcy.
Mallinckrodt is the first opioid manufacturing company to reach a national settlement agreement with municipal governments and most of the states. Offers from other defendants, such as OxyContin‘s maker Purdue Pharma (which is now also seeking to restructure in bankruptcy court) and from other massive drug distributors like McKesson and Johnson & Johnson, have yet to be accepted by the vast majority of plaintiffs.
Several lawyers who are negotiating on behalf of the states and municipalities who sued Mallinckrodt released a statement saying they were still working on the details of the agreement:
“Our pursuit of corporate accountability against a host of other defendants across the entire drug supply chain will not stop.”
New York is among the few states that have not yet officially accepted Mallinckrodt’s offer. Its trial, which includes Nassau and Suffolk counties, begins on March 20 and will be against a group of drug industry defendants, including Mallinckrodt.
Letitia James, New York attorney general, said in a statement:
“While we continue to work with other states and creditors to ensure that any proposal involving Mallinckrodt serves the interests of our communities and that money can flow to our communities for remediation as quickly as possible, we have yet to reach a final agreement with the company on all terms of a New York settlement.”
This isn’t the first opioid manufacturing company that has agreed to a settlement, however. In 2019, Purdue Pharma and Teva Pharmaceuticals agreed to pay over $350 million related to lawsuits filed by the Oklahoma attorney general over accusations that the companies contributed to the state’s opioid epidemic.
Also, in Ohio, Cuyahoga and Summit counties reached a deal with Johnson & Johnson, AmerisourceBergen Corp., McKesson Corp., Cardinal Health Inc., and Teva Pharmaceutical Industries Ltd. for a combined settlement of more than $280 million.
About the Epidemic
The Centers for Disease Control and Prevention (CDC) has reported that from 1999-2017, nearly 218,000 people in the U.S. died from prescription opioid-related drug overdoses. According to statistics provided by the agency, these deaths were five times higher in 2017 than in 1999. Of the more than 70,000 overdose fatalities, a prescription or illicit opioid was involved in more than two-thirds (68%) of those deaths.
Other statistics issued by the National Survey on Drug Use and Health estimate that 10.3 Americans age 12 and older abused opioids in 2018. This number includes 9.9 million who misused prescription painkillers and more than 808,000 heroin users.
Getting Treatment for Opioid Addiction
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Our compassionate addiction specialists and staff are dedicated to ensuring that each individual we treat receives the tools, education, and support they need to get sober and sustain a drug-free life indefinitely. We believe that everyone, regardless of their history or experiences, deserves the very best care available, and we tailor our programs with this ideal in mind.
If you or someone you loved is struggling with opioid addiction, we urge you to contact us today! We can help you free yourself from active addiction for life, and will support and care for you every step of the way!