By Dietrich Knauth
NEW YORK, May 1 (Reuters) – Purdue Pharma said on Friday that it has ceased operations and concluded its bankruptcy, re-emerging as a nonprofit focused on treating opioid addiction, overseen by a new board with government and health industry experience.
Purdue, which filed for Chapter 11 in 2019, had long planned the transition to a new entity called Knoa Pharma as part of a $7.4 billion bankruptcy settlement meant to devote all of the company’s resources to addressing the harms of the opioid crisis. The company had been sued in thousands of lawsuits over its role in fueling the opioid epidemic in the U.S., and it has twice pleaded guilty to federal charges over its marketing for its painkiller OxyContin.
Purdue’s criminal sentencing, completed earlier this week, removed the final hurdle to the company’s bankruptcy plan going into effect.
Many victims of the opioid crisis shared stories of addiction, loss, and grief at Purdue’s sentencing hearing on Tuesday. A Reuters review of court filings and interviews with opioid victims revealed deep frustration with the bankruptcy settlement’s hurdles to payment for victims. About 40% of individual claims have already been rejected.
Purdue pleaded guilty in 2020 to charges that it misled federal regulators about its efforts to combat illegal use of its addictive painkiller OxyContin and admitted paying kickbacks to doctors to boost sales of the drug. The company previously pleaded guilty to misleading doctors and regulators about the addictive nature of OxyContin in 2007.
Knoa Pharma’s trustees include Rahul Gupta, who led the White House Office of National Drug Control Policy under President Joe Biden; Paul Rothman, former CEO of Johns Hopkins University School of Medicine; and David Saltzman, co-founder of the Atria Health and Research Institute.
Knoa will sell medicine for overdose reversal and addiction treatment at or below its cost of production.
“Through not-for-profit access to overdose reversal medicines and treatments for opioid use disorder, Knoa Pharma is committed to providing care and saving lives in communities most affected by the opioid crisis,” Rothman said in a statement.
Most of Purdue’s settlement money will go to states and local governments that were forced to bear the costs of opioid addiction in their communities, and $865 million is earmarked for individual claimants who became addicted to opioids or lost loved ones.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Aurora Ellis)
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