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Texas AG says Prude Pharma bankruptcy filing expected, states to get billions to address opioid epidemic

AUSTIN – Purdue Pharma filing for Chapter 11 bankruptcy on Sunday was not unexpected, says Texas Attorney General Ken Paxton.

The maker of OxyContin has been locked in litigation with hundreds of municipalities and dozens of states, including Texas, for more than a year now.

“During that time, our focus has been not only on accountability, but on obtaining the resources we need to get the victims of this epidemic the help they deserve,” Paxton said in a statement. “To that end, we have been negotiating with Purdue Pharma and the Sackler family to obtain those resources without the delay of lengthy litigation and squandering the resources of the company on unnecessary court costs.”

The bankruptcy will lead to the drug maker providing an estimated $10 billion in funding to combat the opioid epidemic.

“This bankruptcy filing was not unexpected and is consistent with the framework structure agreed upon by a bipartisan group of 29 Attorneys General and Purdue Pharma to obtain those resources to help the communities impacted by opioid misuse and addiction,” Paxton said. “In the structured bankruptcy process agreed to by the Attorneys General, Purdue Pharma will be dismantled, the Sackler family will divest from all overseas pharmaceutical operations, and States will obtain billions of dollars toward addressing the harms caused by the opioid epidemic.”

The agreed terms of this bankruptcy are expected to provide far more recovery for the victims of opioid addiction than would be provided absent the agreement, according to Paxton.

In Texas, dozens of governmental entitles have filed opioid suits, with most being ushered into a state MDL in Harris County. The counties and cities in that MDL have relentlessly fought to keep their litigation from being removed to the federal one.

Court records show that Hidalgo County has already filed a motion to sever Purdue from its claims.

“Johnson & Johnson, also a Defendant to this lawsuit, has previously taken advantage of the bankruptcy of a codefendant to fraudulently remove 2,400 talcum powder cases to federal court on the basis that they were ‘related to’ the codefendant’s bankruptcy…” the motion states.

“Even though … federal district judges refused to ‘reward’ Johnson & Johnson’s ‘patent forum shopping,’ … the company successfully delayed talcum powder litigation for months.”

In addition to Texas, there are 23 other States and five U.S. Territories participating in the settlement agreement currently. 

The 23 States include: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah, West Virginia, Wyoming. 

The participating Territories are: American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.