Purdue Pharma is considering filing for bankruptcy as the OxyContin maker looks to limit its potential liabilities from lawsuits over the drugmaker’s alleged role in the nation’s deadly opioid epidemic, according to reports that cited people familiar with the matter.
The company’s move to consider a Chapter 11 filing, first reported by Reuters, highlights the financial overhang on the company from the mounting litigation based on claims it misled physicians and consumers about the dangers of using its prescription opioids.
Declaring bankruptcy would stop the lawsuits and let Purdue, which is owned by the wealthy Sackler family, to work through legal claims under court supervision, sources told the wire service.
Three brothers built the family drug business, with its marketing methods helping turn the Sacklers into billionaires and one of the 20 richest families in the U.S.
The pharmaceutical firm and other opioid makers are accused of using deceptive practices to encourage use of the addictive drugs involved in nearly 48,000 fatal overdoses in 2017, according to the U.S. Centers for Disease Control and Prevention.
Purdue hasn’t made a final decision on whether to seek bankruptcy protection, and the Stamford, Connecticut, company could ultimately opt to keep fighting the litgiation, Reuters reported.
More than 1,600 lawsuits accusing Purdue and other opioid manufacturers of aggressively pushing addictive drugs that led to fatal overdoses are consolidated in an Ohio federal court, the wire service added.
The Wall Street Journal also reported that Purdue is exploring bankruptcy as a means of resolving the escalating litigation, despite having no significant debt.
“As a privately-held company, it has been Purdue Pharma’s longstanding policy not to comment on our financial or legal strategy,” a Purdue spokesperson told CBS MoneyWatch by email.
“We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.”
Two public companies also named in lawsuits tied to the opioid crisis were hit on Wall Street on Monday. Shares of Endo International were down 15 percent, while Insys Therapeutics fell 3 percent.
— Story by Kate Gibson – CBS News Moneywatch
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