The Supreme Court last year blocked a previous settlement proposal from Purdue, arguing that the plan would afford the Sackler family too much protection.
Purdue Pharma on Wednesday filed another Chapter 11 Reorganization Plan with an eye toward delivering more than $7.4 billion in opioid settlement payments.
Last year, the Supreme Court in a slim 5–4 vote blocked Purdue’s previous attempt to claim bankruptcy. The pharma’s prior plan, according to the justices, would have seen the Sacklers hand over up to $6 billion, but would also protect the family from future litigation. This would afford the Sacklers too much protection from fallout in the company’s role in the U.S. opioid epidemic, according to the justices, who noted that such safeguards are not backed by federal bankruptcy laws.
Under Wednesday’s new reorganization proposal, the Sacklers would contribute between $6.5 billion and $7 billion to the total settlement value, of which $1.5 billion would be disbursed upfront while the remaining balance would be payable over the next 15 years. In turn, a public benefit company would deliver the money to creditors “to compensate victims and abate the opioid crisis,” according to Purdue’s Wednesday release.
Of note, the new plan “does not contain non-consensual third-party releases.” Creditors will instead have to opt in to the plan to receive payments. Otherwise, creditors that choose to not participate in the program will retain their right to sue the Sacklers.
Purdue’s new plan is set to come before a bankruptcy court in May 2025 for confirmation or amendments. If approved, Purdue will then put the plan up for an internal vote before it can be implemented.
Purdue, once owned by the Sackler family, is widely considered the chief architect of the opioid crisis in the U.S. Many allege that its synthetic opioid painkiller Oxycontin was marketed aggressively—with its side effects and addictive nature downplayed—leading to the wave of overdoses across the country.
The pharma in November 2020 pleaded guilty to criminal charges related to the epidemic, in a plea deal that included accepting responsibility for it, but the Sacklers themselves have since tried to evade accountability. In December that same year, the family apologized to victims in a virtual appearance at a hearing but stopped short of admitting their own personal role in the crisis.
Purdue’s proposal comes as change may be on the horizon in the pain space. In January, the FDA handed a landmark approval to Vertex Pharmaceuticals’ Journavx, the first non-opioid painkiller in more than 20 years. Several other biopharma players are following in Vertex’s footsteps, advancing their own non-addictive analgesics.
One of these is Latigo Bio, which is running a Phase II trial for its sodium channel blocker LTG-001. Lexicon Pharmaceuticals, meanwhile, is advancing the small-molecule painkiller pilavapadin, which targets the AAK1 protein, a mechanism that has been shown to alleviate neuropathic pain. Pilavapadin is in Phase IIb development for diabetic peripheral neuropathic pain, topline results from which showed the candidate could meaningfully reduce pain through 8 weeks.
