Oxycontin-maker Purdue Pharma is preparing for a possible bankruptcy filing as it faces hundreds of lawsuits over its role in the U.S. opioid epidemic, Reuters and the Wall Street Journal reported Monday.
The drugmaker has hired advisers to prepare for a potential filing, the Journal said, citing people familiar with the matter. Bankruptcy would let the company negotiate claims with some of the more than 1,500 cities, states, local governments and other entities that have sued Purdue and other health companies over their roles in the opioid epidemic.
Purdue is the focus of ongoing or pending lawsuits by at least 20 of Utah’s counties and the state.
Purdue spokesman Robert Josephson declined to comment on the reports.
"We are, however, committed to ensuring that our business remains strong and sustainable," Josephson said in an email. "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."
The lawsuits against drugmakers and distributors have opened up the potential for billions of dollars in liabilities as governments grapple with mounting human and financial costs of the opioid epidemic.
More than 700,000 people in the U.S. died from drug overdoses from 1999 to 2017, according to the Centers for Disease Control and Prevention, and more than two-thirds of those were opioid-related. Three years ago, Utah was tied for the third-highest prescription opioid death rate in the country. While the epidemic of addiction and death began with prescription pills marketed by Purdue and other drug companies, it has shifted to include heroin and synthetic compounds like fentanyl.
Utah’s counties and state officials have accused opioid manufacturers of “bankrolling” doctors in dishonest marketing schemes designed to promote highly addictive drugs as treatments for chronic pain, downplaying the risks and overstating the benefits.
In the lawsuits, the counties seek to recoup their costs for increased law enforcement, criminal justice, drug treatment and other social services.
Purdue and other drugmakers have said they didn't act improperly in marketing their medicines.
Shares of other companies named in the lawsuits fell after the reports. Drugmaker Endo International Plc was down as much as 15 percent, and Mallinckrodt Plc fell as much as 6.7 percent. Drug distributors AmerisourceBergen Corp., Cardinal Health Corp. and McKesson Corp. also fell.
Purdue joins Johnson & Johnson, Ortho-McNeil-Janssen Pharmaceuticals and Watson Pharmaceuticals as defendants in the Utah lawsuits.
With assistance from Riley Griffin and Jef Feeley.