Mallinckrodt Pharmaceuticals has tentatively agreed to pay $1.6 billion to settle thousands of lawsuits filed by state and local governments over its role in the opioid epidemic. As the country’s largest generic opioid manufacturer, Mallinckrodt sold more opioids in the U.S. during the crisis than any other company.
A committee of lawyers representing thousands of counties and cities, as well as 47 U.S. states and territories, has endorsed the agreement, which requires the money be paid into a cash trust to underwrite the costs of opioid addiction treatment nationwide. Under its terms, Mallinckrodt’s U.S. division that produces generic opioids would file for Chapter 11 bankruptcy. Once the bankruptcy is approved, the defendant would disburse an initial payment of $300 million, followed by $1.3 billion to be paid out over 8 years.
“Nothing can undo the devastating loss and grief inflicted by the opioid epidemic upon victims and their families, but this settlement with Mallinckrodt is an important step in the process of healing our communities,” California Attorney General Xavier Becerra said in a statement. “Our office has worked aggressively to hold accountable bad actors who fueled this public health crisis.”
The state of New York, which is set to go to trial along with its Suffolk and Nassau counties on March 20, has not yet confirmed acceptance of the offer. “While we continue to work with other states and creditors to ensure that any proposal involving Mallinckrodt serves the interests of our communities and that money can flow to our communities for remediation as quickly as possible, we have yet to reach a final agreement with the company on all terms of a New York settlement,” New York Attorney General Letitia James, said in a statement. “Unless that happens, we are determined to press ahead with the trial against the company next month.”