Purdue Pharma LP Reorganization Plan Receives Bankruptcy Court Approval
STAMFORD, Connecticut – (COMMERCIAL THREAD) – The United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) today approved Purdue Pharma LP’s Chapter 11 Reorganization Plan (the “Plan”). The plan received overwhelming support from over 95% of voting creditors, including all categories of voting creditors and bipartite state attorneys general from 43 states and territories.
“The confirmation is positive proof that representatives of disparate stakeholders can work together under difficult circumstances and produce an outcome that is truly in the public interest,” said Steve Miller, who joined Purdue Pharma LP at the mid-point. 2018 as Chairman of its Board of Directors. “Instead of years of value-destroying litigation, including between and among creditors, this plan ensures billions of dollars will be spent helping the people and communities that have been affected by the opioid crisis.”
In approving the plan, the federal bankruptcy court determined that the plan is fair, reasonable and in the best interests of the estate. This decision was made after a lengthy trial that spanned three weeks, during which numerous facts and expert witnesses testified, and after reviewing more than 4,000 pages of affidavits and expert testimony from many parts.
Today’s decision upholding Purdue’s plan comes after a multi-year, arduous and inclusive process in which governments, creditors and representatives of individual victims came together to forge a solution that has received the support of more than 95% of Purdue’s creditors. This process included more than a year of mediation between several groups of government and private creditors as well as in front of shareholders. “We deeply appreciate all of the parties who put their hearts and souls into this process, and we admire the people who have stepped forward to share their stories,” Miller continued. “We are committed to quickly handing over the assets of Purdue to the new, post-emergent company with a public interest mission and the ability to develop drugs that can help deal with the opioid crisis.”
As soon as the plan goes into effect, billions of dollars will begin to flow into a National Opioid Abatement Trust (“NOAT”) established with the mission to fund opioid crisis reduction efforts in response to claims filed by states. and localities, as well as opioid reduction trusts established for the benefit of other creditors such as Native American tribes (the “tribal trust”), hospitals, third-party payers and children with a history of the syndrome of neonatal abstinence and their guardians. An additional $ 700 million to $ 750 million will be provided to trusts that will make distributions to qualified personal injury claimants.
Purdue will cease to exist and substantially all of its operating assets will be transferred to a newly formed company with a public policy mission to address the opioid crisis. The new company will be primarily owned by NOAT, with the Tribe Trust holding a minority stake. The new post-emergence company will also develop and distribute millions of doses of opioid dependence treatment and overdose reversal medication.
The Sackler families will have no involvement in the new company and are contributing $ 4.325 billion (on top of the $ 225 million already paid to the United States Department of Justice) in the estates. In addition, during the trial, the bankruptcy court significantly reduced the scope and scope of the releases provided to shareholders under the settlement.
Purpose, governance and oversight
The new company will operate in a responsible and sustainable manner, taking into account the long-term public health interests associated with the opioid crisis. The new company will continue to serve patients and consumers who depend on Purdue’s existing drugs and products, continuing its pipeline and introducing new drugs.
The new company will be managed by new independent directors chosen by the stakeholders. It will be held to the highest standards of conduct required to comply with a detailed injunction continuing to restrict the promotion of opioid products, and will be subject to operating commitments to ensure that all of its products, including all opioid products , are provided in a secure manner which reduces the risk of diversion. A corporate monitor will continue to ensure that the new business complies with the court-ordered injunction and will report regularly on compliance.
From the start of the bankruptcy proceedings, the company undertook to create a repository of documents making available to the public the basic documents relating to its historical sales and marketing practices. Tens of millions of documents will eventually be placed in the public repository.
The repository will initially contain around 13.7 million documents, mainly comprising documents which have already been produced in various legal proceedings and which relate to the development and promotion of opioids.
The company has also agreed to provide millions of additional documents not previously produced in litigation or investigation, as well as hundreds of thousands of privileged documents from the years Purdue developed and promoted opioids.
The repository will be significantly larger than the entire tobacco industry repository – which spanned decades, several companies and did not include any privileged documents.
The new company will publish semi-annual reports that will describe the achievement of its core mission, the short and long term value created by the company and the public benefits achieved in accordance with its mission. In addition, each clearance trust will publish annual reports on the disbursement and use of clearance funds. Compliance with the allocation of funds for authorized reduction purposes will be tracked in these reports.
Advancing public health
Using its scientific and technical expertise, the new company will oversee the continued development and eventual distribution of three drugs for the treatment of opioid dependence and overdose reversal that can potentially save and improve lives *.
Buprenorphine naloxone tablets – The new company will supply / distribute millions of doses of a generic version of buprenorphine and naloxone CIII sublingual tablets, a treatment for opioid addiction. The FDA approved a generic version of buprenorphine and naloxone tablets in 2020. (For full prescribing information, click here; for medication guide and warnings, click here.)
Over-the-counter (OTC) naloxone nasal spray – The company will continue to support the development of a low-cost over-the-counter naloxone intranasal spray through a collaboration with Harm Reduction Therapeutics which will be sold over the counter without a prescription, and for a fraction of the cost of existing nasal spray naloxone treatment, making it easier for more people to afford, access and use.
Injectable Nalmefene – The Company will continue to advance the development of Injectable Nalmefene, an opioid antagonist designed to reverse opioid overdoses, in three dosage forms: vial, pre-filled syringe and auto-injector. The FDA has previously granted Competitive Generic Therapy designation for the vial and pre-filled syringe, and Fast Track designation for the autoinjector. Nalmefene may be another treatment option to help cope with the growing and continuing crisis of opioid overdose deaths, including those due to fentanyl and other synthetic opioids.
A plan with unprecedented support
The plan was supported by over 95% of the more than 120,000 voting creditors, almost 97% of state and local government creditors, bipartite attorneys general from 43 states / territories and (1) the Official Committee on Unsecured Creditors , (2) the ad hoc committee of government claimants and other possible litigation, (3) the group of multi-state government entities, (4) the group of Amerindian tribes, (5) the ad hoc group of individual victims, (6 ) the Ad Hoc Group of Hospitals, (7) the Third Party Payers Group, (8) Participants in Taxpayer Mediation and (9) the SIN Committee representing caregivers and children affected by SIN who have filed claims against Purdue.
“There has been close collaboration between a wide range of stakeholders over the past two years, and we are grateful for the tireless work and good faith efforts of so many who have brought us to this point,” said Mr Miller said. “While historically the plan enjoys broad support, we also know that there have been deep-seated views on the other side. We hope this is the time when all parties join the overwhelming majority so that the billions of dollars can begin to flow from day one. ”
* This information deals with experimental uses of agents in development and is not intended to convey conclusions about efficacy or safety. There is no guarantee that the drugs listed in this release will successfully complete development or gain FDA approval.
About Purdue Pharma LP
Purdue Pharma and its subsidiaries develop, manufacture and market drugs and consumer health products to meet the evolving needs of healthcare professionals, patients, consumers and caregivers.
Purdue’s reorganization plan will bring billions of dollars to communities across the country to fund programs specifically for reducing the opioid crisis. The bankruptcy settlement will also provide funds to private clean-up trusts for the benefit of personal injury claimants.
Almost all of Purdue’s assets will be transferred to a new post-emergence company with a public interest mission. This new company will be led by new independent members of the Board of Directors and will operate in a responsible and sustainable manner taking into account the long-term public health interests related to the opioid crisis. The company will continue to serve the patients and consumers who depend on its drugs and products, continue its pipeline and introduce drugs that will help save and improve lives.