It has been accused of contributing to a public health crisis that has led to nearly 400,000 overdose deaths between 1999 and 2017, according to the latest U.S. data.
OxyContin maker, Purdue Pharma LP, filed for bankruptcy on Sunday after reaching a draft deal with states and local governments that accuse the company of deceptively marketing opioids by overstating their benefits and downplaying the drugs' risks, which prompted the United States government to declare a nationwide 'opioid epidemic' in 2017.
The settlement, which Purdue claims is worth more than US$10 billion, would require the Sackler family to cede their ownership of Purdue to a trust controlled by the plaintiffs that are suing the drug company. In addition to turning over Purdue, the Sacklers would sell their non-U.S. pharmaceutical businesses and also contribute about US$3 billion of their own money to those who brought forth the case.
Numerous states oppose the plan, including New York. A lawyer for the state says that the proposed deal did not address how settlement funds will be allocated among governments. He also said settling states did not appear as interested in conducting thorough investigations of Purdue.
"We have different views and different experiences in terms of our aggressive pursuit of some issues, including payments to the Sacklers," said David Nachman, who leads the New York's opioid litigation.
On Friday, New York Attorney General Letitia James said she uncovered roughly US$1 billion in wire transfers "between the Sacklers, entities they control and different financial institutions, including those that have funneled funds into Swiss bank accounts."
A spokesman for former Purdue board member Mortimer D.A. Sackler said in a statement that the transfers were legal and appropriate, and accused James of using the transfers to try to undermine the settlement.
Purdue is the second drug company to seek bankruptcy over causing the U.S. opioid crisis. Insys Therapeutics Inc. filed for bankruptcy in June, also citing opioid litigation.
The Chandler, an Arizona-based drugmaker, which recently agreed to sell its flagship fentanyl spray Subsys, unveiled a liquidation plan to repay its creditors on Tuesday, including states and localities that have sued. The plan did not spell out how much state and local governments would recover, but said they would not be paid in full.