Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Cracks in Purdue's proposed opioid settlement as Arizona backs out

Published 10/08/2019, 03:01 PM
Updated 10/08/2019, 03:01 PM
© Reuters. FILE PHOTO: Bottles of prescription painkiller OxyContin, 40mg, 20mg and 15mg pills, made by Purdue Pharma L.D. sit on a counter at a local pharmacy in Provo

(Reuters) - The U.S. state of Arizona withdrew its support for a proposed nationwide opioid settlement with Purdue Pharma LP, saying the maker of OxyContin sought to "undermine material terms of the deal," according to a court filing on Monday.

Since Purdue filed for bankruptcy protection in September, Arizona is the first state to switch sides in the looming showdown over the privately-held company's proposed settlement, which it has estimated is worth more than $10 billion.

Purdue reached the deal last month with 24 states and the local governments that have filed the bulk of the more than 2,600 lawsuits against the company.

The lawsuits allege Purdue and its Sackler family owners contributed to a public health crisis by aggressively marketing opioids while downplaying their overdose risks, which contributed to nearly 400,000 deaths since 1999, according to U.S. statistics.

Last week, court filings from states and local governments opposing the settlement asserted that Purdue steered up to $13 billion in profits to the Sackler family, more than triple the amount previously cited in litigation.

A lawyer for some of the Sacklers last week said in a statement that much of the money was paid in taxes and reinvested in businesses that will be sold as part of the proposed settlement.

Arizona's filing offers little explanation of why the state backed away from its initial support. "At nearly every turn during the course of subsequent negotiations, debtors have sought to undermine material terms of the deal," it said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Arizona's attorney general did not immediately respond to a request for comment. Purdue declined to comment.

U.S. Bankruptcy Judge Robert Drain in White Plains, New York, will consider on Friday Purdue's request for an injunction to pause the litigation for about nine months. Purdue said it needs time to try to settle the remaining cases.

Purdue also asked Drain to shield the Sacklers from litigation, even though they have not filed for bankruptcy, partly because the family has proposed contributing at least $3 billion toward the settlement.

Opponents of the settlement accused the family of using Purdue's bankruptcy to shield their wealth from victims.

With Arizona, 25 states now oppose the deal. Kentucky and Oklahoma reached prior settlements with Purdue.

In addition to pursuing a case in state court against Purdue, Arizona is also pursuing a novel lawsuit that it filed directly with the U.S. Supreme Court, saying the unusual move was justified by the national importance of the opioid crisis.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.