Get involved in the discussion! Click here to comment on this story
On the heels of Johnson & Johnson’s $572 million verdict in Oklahoma this week, opioid settlement talks seem to be heating up. Several reports say Purdue Pharma has offered $10 billion to $12 billion to resolve thousands of lawsuits grouped up in Cleveland.
Under a potential settlement, Purdue would declare bankruptcy and the billionaire Sackler family who own the company would give up control of the drugmaker, Reuters reports. NBC News first reported Purdue’s offer. The Sacklers themselves would pay $3 billion of the total, reports say.
A Purdue representative told FiercePharma the company is “prepared to defend itself vigorously in the opioid litigation” but has “made clear that it sees little good coming from years of wasteful litigation and appeals.”
“The people and communities affected by the opioid crisis need help now,” she added. “Purdue believes a constructive global resolution is the best path forward, and the company is actively working with the state attorneys general and other plaintiffs to achieve this outcome.”
Under the reported deal, Purdue would restructure as a “public benefit trust” for a minimum of 10 years, according to reports. Instead up upfront cash, the company would provide more than $4 billion in free drugs, including overdose-reversal medicines. It’d also chip in from profits of ongoing drug sales to bring the company’s contributions to between $7 billion and $8 billion.
The Sacklers’ reported $3 billion contribution toward a settlement would still leave them with billions in wealth. In 2016, Forbes calculated their net worth to be around $14 billion, with the wealth coming primary from opioid sales. The sides are approaching a Friday deadline to update the judge in Cleveland about settlement talks, according to Reuters.
News of the settlement offer comes right after a judge ordered Johnson & Johnson to pay $572 million following an opioid trial in Oklahoma. After the ruling, Wells Fargo analyst David Maris said he believes the verdict will prompt other opioid drugmakers to “think more seriously” about settling the more significant group of cases—the multidistrict litigation (MDL) in Cleveland.
More than 2,000 cities, counties and other entities from around the country have sued opioid drugmakers, distributors and other defendants, alleging their actions contributed to a national epidemic. Plaintiffs say drugmakers oversold opioid benefits for treating chronic pain and downplayed their risks, and that distributors failed to monitor suspicious orders.
Many of the lawsuits are grouped up in the Cleveland MDL. Maris said he believes a global settlement could come in north of $50 billion.
On news of the Purdue settlement offer, Maris wrote that he thought Purdue’s portion of a deal “might be larger, and as such, we are not sure of the public’s taste for accepting a $10 billion or $12 billion deal, let alone one that is comprised only in part of cash and the rest of royalties from drugs and donations taken at list price of high margin drugs.”
But if Purdue does reach a deal, that could pressure other drugmakers to “move into settlement mode,” the analyst wrote.
Already, as the first MDL cases near a bellwether trial in October, Endo and Allergan have inked small settlements to sidestep that trial. Judge Dan Polster in Cleveland has reportedly pushed for settlements as a way to resolve the complex litigation and to address the nationwide opioid crisis.
With the opioid overhang, some drugmakers are hurting. Teva shares closed Tuesday at nearly a 20-year low, while Mallinckrodt shares closed at an all-time low, Maris pointed out.
By Eric Sagonowsky
Source: Fierce Pharma
LinkedIn Twitter FacebookMerck & Co has had mixed fortunes in neurological diseases of late, but remains committed to the category and has just bolstered its early-stage pipeline with a $576 […]
LinkedIn Twitter FacebookAbbott Laboratories chief Miles White will shed the CEO title next year after a 21-year run and several major transformations at the global healthcare company. White will officially […]
LinkedIn Twitter FacebookThermo Fisher Scientific has begun early talks to take over Dutch diagnostics maker Qiagen, which has the potential to become one of its largest acquisitions, according to a […]