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Purdue Pharma is reportedly exploring bankruptcy to deal with nearly 2,000 lawsuits that blame the company for its part in a national opioid crisis.
In an exclusive report, Reuters explained that the privately-held company faces "significant liability" for OxyContin and its role in the epidemic of drug abuse. The cost of litigation and market losses are mounting, as plaintiffs attorneys look for billions of dollars in damages.
The company has denied liability and deflected questions about bankruptcy, but an upcoming trial could change everything.
Purdue says the U.S. Food and Drug Administration approved its painkillers, including warnings on labels about the risk of abuse. The plaintiffs say the company knew about the risks of addiction, but deceptively marketed them.
More than 1,600 lawsuits against Purdue and other opioid makers have been consolidated in an Ohio federal court. The parties have discussed settlement, but the plaintiffs' demands are reportedly like a $246 billion settlement with the tobacco industry in 1998.
Meanwhile, more plaintiffs are joining the litigation deluge. San Francisco recently sued Purdue and more than two dozen other defendants.
"These companies and the people who own them put their greed ahead of human lives," City Attorney Dennis Herrera said in a statement. "Their profits came at a staggering human cost."
Bankruptcy Not Certain
In Oklahoma, the state attorney general is preparing for a May trial. If Purdue were going to file for bankruptcy, now would be a good time.
However, Reuters said a bankruptcy filing is not certain. The company has not made a final decision, sources said.
"As a privately-held company, it has been Purdue Pharma's longstanding policy not to comment on our financial or legal strategy," the company said in a statement. "We are, however, committed to ensuring that our business remains strong and sustainable."
Prescription painkillers, opioids, heroin, and fentanyl were involved in 47,600 overdose deaths in 2017. That was six times more than in 1999, according to the U.S. Centers for Disease Control and Prevention.