Embattled OxyContin maker Purdue Pharma filed for bankruptcy on Sept. 15, according to The New York Times.
The Chapter 11 bankruptcy filing is part of the drugmaker's strategy to protect itself and its owners from more than 2,600 lawsuits accusing the company of fueling the opioid epidemic in the U.S. by downplaying the risks associated with taking OxyContin.
Purdue Pharma's board approved the much-anticipated bankruptcy filing, just a few days after the drugmaker reached a tentative deal to settle lawsuits with thousands of cities and counties. To date, 24 states and five U.S. territories also have accepted the agreement.
Restructuring the company through bankruptcy was part of the tentative settlement reached last week, according to the report.
"This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public," said Steve Miller, chairman of Purdue Pharma's board of directors. "This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis."
With the Chapter 11 filing, Purdue Pharma expects an automatic stay of current civil litigation.
Purdue Pharma would be restructured completely into a public benefit trust. Any profit the company makes from OxyContin and other drugs would go toward paying the plaintiffs' claims and supporting research and development of drugs to treat addiction. Restrictions also would be placed on the new company's marketing and sale of opioids.
Read the full story here.