Daily Management Review

Purdue Pharma unveils new plan to emerge from bankruptcy


US pharmaceutical company Purdue Pharma, considered one of the main culprits of the US opioid epidemic, has submitted a plan to emerge from bankruptcy. The plan has been submitted to the bankruptcy court in White Plains, New York.

As the submitted plan suggests, Purdue Pharma will be dissolved and all of its assets will be transferred to a new company, which will operate "to the highest standards". 

The new company will be ultimately owned by the National Opioid Abatement Trust (NOAT), which will settle claims from state and county authorities. In addition, several other such funds will be set up to settle claims from individuals, etc. Purdue Pharma is committed to transfer $500 million to these funds as soon as it emerges from bankruptcy. It then intends to earn about $1 billion from the operations of the newly formed company by the end of 2024 and transfer these funds to the funds as well. 

Another $4.3 billion will be provided for the same purpose by Purdue Pharma's founding family members. In addition, $4 billion will be spent through the Public Health Initiatives division to develop and distribute drugs to combat addiction and relieve the effects of opioid overdose. In this case, the founding family members pledge to sell all of their pharmaceutical assets within seven years and no longer manufacture or sell opioid drugs.

Thus, the submitted plan envisages a $10 billion expenditure on settling claims and dealing with the consequences of the opioid crisis. Purdue Pharma itself says the plan has the support of most stakeholders. 

However, CNBC reports that prosecutors in 23 states and the District of Columbia have issued a statement saying that the plan falls short of the level of accountability that those affected by the opioid epidemic deserve. The bankruptcy court will consider the submitted plan on 21 April, after which it will be discussed by Purdue Pharma's creditors.

source: cnbc.com