Purdue Pharma, the embattled US drugmaker accused of helping to fuel the opioid drug crisis, has filed for bankruptcy in the face of more than 2,000 lawsuits across the country.
The company – behind controversial opioid painkillers such as OxyContin – reached an agreement last week to settle the majority of those lawsuits in a deal expected to cost Purdue between £8bn-£10bn.
It filed for Chapter 11 bankruptcy late on Sunday night in New York, as part of a move to wipe out the lawsuits and restructure the company ahead of a settlement.
The agreement does not include an admission of guilt, but will remove Purdue from a federal trial against pharmaceutical companies set to begin in October.
It comes just days after the company reached a settlement with prosecutors who allege that Purdue aggressively marketed prescription painkillers while misleading doctors and patients.
The Sackler family, which own Purdue, deny any wrongdoing.
A number of states – including New York, New Jersey, and Nevada – have opted to hold out for a larger settlement to contribute towards law enforcement and healthcare costs related to the opioid epidemic.
These states have said they are pursuing the Sackler family for a greater share of their personal wealth to be added to the settlement.
“We are hopeful that, in time, those parties who are not yet supportive will ultimately shift their focus to the critical resources that the settlement provides to people and problems that need them,” said a spokesperson for the Sackler family.
“We intend to work constructively with all parties as we try to implement this settlement.”
An agreement will see the Sacklers hand over Purdue to a trust controlled by the states damaged by the drug epidemic. The family itself is expected to pay at least £3bn towards the settlement.
Purdue will also sell its international arm, Mundipharma, which it values at £1.5bn.