ST. LOUIS – The president of Mallincrodt Pharmaceuticals, the country’s biggest manufacturer of generic opioids, said the company would weather a $1.6 billion agreement to settle thousands of lawsuits and go on to a brighter future.
“In spite of the uncertainties impacting the business, we have continued to deliver strong earnings and cash flow as evidenced by our fourth quarter and 2019 results issued today,” Mallinckrodt president and CEO Mark Trudeau said in a statement provided to the St. Louis Record. “Looking ahead, we remain focused on our vision to develop and bring to market innovative therapies for underserved patients with severe and critical conditions."
Mallincrodt is a global business but has facilities and does a share of its business in Missouri.
Last month the company tentatively agreed to pay $1.6 billion to settle thousands of lawsuits brought by state and local governments over its role in the opioid crisis.
Opioids, pain-killing drugs, have been the focus of lawsuits across the country accusing the makers of such drugs for causing an epidemic of overdose deaths and also doctors for over-prescribing the drugs.
According to the New York Times, Mallinckrodt is the first opioid company to reach a tentative national settlement agreement with municipal governments and most states.
Under the terms of the settlement, Mallinckrodt will file for Chapter 11 bankruptcy and engage in a restructuring plan approved by a judge; then a first payment of $300 million would be made to plaintiffs to alleviate the opioid crisis. An added $1.3 billion would be paid out over eight years.
The New York Times report said the Centers for Disease Control and Prevention recorded that from 1999 to 2017, almost 218,000 people died in the United States as a result of overdose related to prescription opioids. The deaths were five times higher in 2017 than they were in 1999, according to the CDC.
In a landmark case last August, the State of Oklahoma won a verdict against opioid maker Johnson & Johnson. The company was ordered to pay $465 million for allegedly causing an overdose epidemic in the state. It was the first time a state sued a drug maker for causing a public nuisance health disaster. The verdict amount was reduced by $107 million when it was discovered a calculation error had been made.
Oklahoma health officials estimated it would take $17.5 billion paid out over 30 years to abate the opioid crisis in the state.
Yet, attorneys for Johnson & Johnson are appealing the Oklahoma case.
New litigation against Mallinckrodt filed by the State of New York is set to begin later this month. New York was not a party to the settlement agreement.