Purdue Pharma, the maker of OxyContin which is partly blamed for the US opioid addiction epidemic, has filed for bankruptcy to settle more than 2,600 federal and state cases, reports say.
The move approved by the company’s board on Sunday night will be strongly contested by 26 states.
It also sets the stage for court battles over the fortune of Sackler family which owns the company.
Purdue chairman Steve Miller called the bankruptcy move the best way for finalising and implementing a resolution to the litigation.
The restructuring of the company will avoid wasting millions of dollars and years over litigation and provide billions of dollars and millions of addiction reversal drugs to the affected people trying to cope with the opioid crisis, Miller said.
The plaintiffs say Purdue, with an eye on profits, aggressively marketed OxyContin and concealed its addictive nature from doctors and patients. According to them, Purdue is responsible for much of the nearly 400,000 overdose deaths between 1999 and 2017.
Under the proposed settlement, the Sackler family, whose fortune is worth $13 billion, will give up control of the company and contribute $3 billion and even more.
A bankruptcy judge has to ultimately approve the company’s reorganisation and settlement.
Protest marches over OxyContin overdose deaths has tainted the good name of the Sackler family. Some top museums in New York, London and Paris are planning to stop future donations from them.