The discussions, part of a mediation to end the mounting litigation that seeks to blame Purdue for fueling the opioid crisis, have been ongoing for more than a year and remain in flux, the people said.
The latest proposal, which came out of settlement talks last week in Cleveland, would put Purdue into bankruptcy and have it emerge as a public benefit trust corporation, with proceeds going toward the governments bringing the lawsuits, the people said.
The Sackler family, which has owned the company since its founding in the 1950s, would cede ownership as part of the bankruptcy reorganization.
The company and plaintiffs’ lawyers face a Friday deadline to give an update on the talks to U.S. District Judge Dan Polster in Cleveland, who is overseeing the bulk of the opioid lawsuits and has been a strong proponent of settling the cases. State attorneys general, whose separate lawsuits aren’t in front of Judge Polster, also are involved in the discussions.
NBC News earlier reported the outlines of the deal.
The settlement talks are coming up against an October trial date in cases filed by two Ohio counties that will take place in Judge Polster’s courtroom. Purdue in March settled a case in an Oklahoma state court for $270 million rather than take the claims to trial.
Purdue, based in Stamford, Conn., faces sprawling litigation accusing it of helping start America’s opioid-addiction crisis through misleading and deceptive marketing of the painkiller OxyContin. Some Sackler family members have been individually named in lawsuits, and documents in one suit brought by the Massachusetts attorney general suggested some members had helped shape marketing strategies for promoting OxyContin.
Purdue and the Sacklers have broadly denied the allegations in the opioid cases.
“The people and communities affected by the opioid crisis need help now,” Purdue said in a statement Tuesday when asked about the settlement discussions. The company said it “believes a constructive global resolution is the best path forward” and “is actively working with the state attorneys general and other plaintiffs to achieve this outcome.”
Representatives for the Sacklers didn’t immediately return a request for comment Tuesday.
Besides Purdue, other drugmakers, wholesalers and retail pharmacy chains face lawsuits brought by states and local municipalities seeking to hold them accountable for the opioid crisis.
On Monday, an Oklahoma judge ordered Johnson & Johnson to pay $572 million for contributing to the state’s opioid-addiction crisis there. The company said it plans to appeal.
Purdue has been under intense financial pressure to settle the cases and find a viable path forward. The company shed its entire sales force last year and has about 500 employees, down from about 1,700 in 2015. Revenue is expected to drop below $1 billion this year for the first time in more than a decade, The Wall Street Journal has reported.
Purdue has sold more than $35 billion of OxyContin, the company’s signature product, since its introduction in 1996.
The current proposal was subject to change as the talks moved forward, said people familiar with the matter.
The proposal also includes the donation of products to treat addiction, such as buprenorphine, and nalmefene, an opioid-overdose antidote the company is developing. Purdue has sought to cast itself in recent years as an advocate for fixing the crisis, donating money to developing and distributing opioid-overdose antidotes.
Among the unresolved elements until the past few weeks were the amount of money Sackler family members would contribute and the source of the funds, according to people familiar with the matter.
The sprawling Sackler family, with competing branches, has long been fractious . The two branches that own Purdue are worth more than $3.5 billion, the Journal has reported, citing people familiar with the Sacklers.
Purdue paid out more than $4 billion to family members between 2008 and 2016, according to the civil complaint brought by the Massachusetts attorney general.
In March, the Journal reported that plaintiffs’ lawyers for cities and counties pressing claims requested at least $10 billion from Purdue and the Sacklers.
Bankruptcy has been on the table since at least earlier this year. Meanwhile, as the family has considered that option and settlement over recent months, it has reduced its official involvement in Purdue. Some members began leaving senior management in the early 2000s, and the family fully exited from the board this year.
Three Sackler brothers—Arthur, Mortimer and Raymond—acquired a company in 1952 that later became today’s version of Purdue Pharma. Raymond and Mortimer bought out the share of the oldest brother, Arthur, after his death in 1987, and Arthur’s heirs weren’t involved in Purdue after that.
Purdue faced a federal investigation in 2007 that led it and three of its executives to plead guilty to criminal charges of misleading the public about the addiction risk related to the drug and to pay $634.5 million in government penalties and costs.