Purdue Pharma was granted permission in U.S. bankruptcy court to sell its consumer health business, Avrio Health, to a subsidiary of Arcadia Consumer Healthcare.
The ruling from a New York court allows Purdue to begin liquidating assets, offloading its consumer biz for $397 million to Arcadia subsidiary Atlantis Consumer Healthcare as the drugmaker awaits a final ruling on a proposed settlement to address the U.S. opioid epidemic.
In a 2007 plea deal, Purdue admitted that it falsely marketed OxyContin as non-addictive. In March 2021, two years after declaring bankruptcy, Purdue proposed a chapter 11 plan. According to the drugmaker, the plan charted a path of more than $10 billion of value, including 100% of Purdue’s assets, to be delivered to claimants and communities across the country affected by the opioid crisis.
The plan was intended to resolve thousands of opioid lawsuits by restructuring Purdue into an entity that would steer profits to plaintiffs and require the company’s owners, the Sackler family, to contribute nearly $4.5 billion (paid out over nine years) to the settlement. It would also dissolve Purdue and transfer its operating assets to a newly formed company with the public-minded mission of addressing the opioid crisis.
Importantly, the funding of billions of dollars from the Sacklers came in exchange for the resolution of both private and public claims against the Sackler family — a point that did not sit well with many people.
On Dec. 16 2021, the U.S. District Court for the Southern District of New York vacated the order confirming the chapter 11 plan of Purdue Pharma. This overturns the $4.5 billion settlement, and means that the Sackler family will not be released from legal claims over the opioid epidemic. One point of contention during the hearing was how the Sackler family members transferred $10.4 billion from the privately held Stamford, Connecticut-based company over the decade before the bankruptcy. Purdue appealed the decision and that appeal is still pending.
A day rarely goes by without opioids making headlines in the national news. With overdoses still at staggering highs (the CDC estimates that 115 Americans die every day from opioid overdose), it has become one of the most devastating health problems in U.S. history.