A privately held pharmaceutical company has negotiated a multibillion-dollar settlement with lawyers for local and state governments that would resolve approximately 2,000 lawsuits against the drug maker. The company is blamed for much of the prescription opioid epidemic in the U.S. The potent opioid painkiller OxyContin was introduced in 1996 and was followed by an aggressive marketing effort that influenced doctors to prescribe it widely and in high doses.
In the settlement, the family that previously owned the company will give up ownership of the pharmacy and contribute $3B in personal assets. In total, the family’s and company’s contributions are estimated to be between $10B and $12B. The New York Times reports that there would not be “a straightforward cash payout. The bulk of the funds would come from restructuring the company under a Chapter 11 bankruptcy filing that would transform it from a private company into a ‘public beneficiary trust.” Profits would then be appropriated to states and municipalities.
This privately held pharmaceutical company is the first drug company to settle claims for its role in the opioid public health crisis that has resulted in the deaths of thousands of people. In 2007, the pharmaceutical company and three executives pleaded guilty to federal charges of misleading doctors and the public about the drugs. The company paid a $635 million fine.
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