Market Overview

OxyContin Maker Purdue Pharma's Legal Entanglement, Explained

OxyContin Maker Purdue Pharma's Legal Entanglement, Explained

Privately held Purdue Pharma, which has the dubious distinction of being a party to the opioid crisis in the U.S., is reportedly considering filing for Chapter 11 bankruptcy as it faces a slew of lawsuits tied to the opioid OxyContin, according to reports from Reuters and the Wall Street Journal.

The Problem With Purdue's OxyContin 

OxyContin is the brand name of oxycodone hydrochloride, which belongs to a class of drug called opioid analgesics. It is a Schedule II controlled substance with abuse potential similar to other Schedule II opioids and is used to manage pain severe enough to require daily, around-the-clock, long-term treatment with an opioid when other pain treatments do not work.

Addiction to opioids such as prescription pain relievers, heroin and synthetics such as fentanyl have become a serious national crisis. More than 47,000 Americans died from opioid overdoses in 2017, according to the National Institute on Drug Abuse. 

Why Bankruptcy? 

With doctors and patients alleging Purdue misled them about the risks associated with the prolonged use of prescription opioids, the company is facing roughly 2,000 lawsuits filed by several states, counties and cities, Reuters said.

In an Ohio federal court, about 1,600 lawsuits against Purdue and other opioid manufacturers such as Endo International PLC (NASDAQ: ENDP) and Insys Therapeutics Inc (NASDAQ: INSY) are being consolidated.

Purdue continues to maintain that the FDA-approved labels for its opioids carried warnings about abuse and misuse. It has also been negotiating with plaintiffs' lawyers to settle the lawsuits.

A Chapter 11 filing could help Purdue stall the lawsuits and negotiate legal claims under the supervision of a U.S. bankruptcy judge. 

The Wall Street Journal, citing people familiar with the matter, said Purdue has hired advisers for initiating a filing. 

Related Links:

FDA Snubs Mallinckrodt's Abuse-Deterrent Opioid Reformulation

Endo International Drops Ahead Of '60 Minutes' Opioid Segment

Posted-In: OpioidsBiotech News Health Care Legal Media Trading Ideas General Best of Benzinga


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