Opioid manufacturer Mallinckrodt Pharmaceuticals has reached a settlement agreement worth $1.6 billion with attorneys general for 47 states and US territories.
Mallinckrodt Pharmaceuticals announced that the $1.6 billion settlement agreement will resolve all opioid-related claims against the company and its subsidiaries if it moves forward.
Under the agreement, the plaintiffs would receive payments over an eight-year period to cover the costs of opioid-addiction treatments and other needs.
Mallinckrodt said: "This court-supervised process is expected to lead to the creation of a trust which, among other things, would establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse."
In a statement, California Attorney General Xavier Becerra argued: "Nothing can undo the devastating loss and grief inflicted by the opioid epidemic upon victims and their families, but this settlement with Mallinckrodt is an important step in the process of healing our communities."
Becerra called Malllinckrodt "the largest generic opioid manufacturer in the United States."
Under the deal, the company's main subsidiaries, including Specialty Generics, will file for Chapter 11 bankruptcy and it will become effective upon Specialty Generics emergence from bankruptcy.
Mallinckrodt's President and chief executive officer (CEO) Mark Trudeau said: "Reaching this agreement in principle for a global opioid resolution and the associated debt refinancing activities announced today are important steps toward resolving the uncertainties in our business related to the opioid litigation."
In 2019, OxyContin manufacturer Purdue Pharma filed for Chapter 11 bankruptcy, partly to resolve legal issues tying it to the US opioid crisis.
The bankruptcy filing was approved by the Purdue Pharma board on September 15, 2019 and was part of the pharmaceutical company’s strategy to resolve over 2,000 lawsuits against it over its alleged role in fueling the country’s opioid epidemic.
The Sackler family-owned business is said to have played a large role in the opioid crisis through the sale of drugs such as the painkiller OxyContin.
