According to news sources, drug manufacturer Mallinckrodt Pharmaceuticals plans to file for bankruptcy under a plan that would allow it to pay $1 billion less to a trust as part of a settlement of claims that it helped fuel the nation’s opioid crisis. One of the largest makers of opioid pain pills in the United States, Mallinckrodt emerged from its first Chapter 11 bankruptcy last year while agreeing to pay $1.7 billion as part of a national settlement to help cities and states ease the addiction and overdose crisis. The Ireland-based company had made its first payment of $450 million but had been unable to make a second $200 million payment due in June.
According to a filing with the Securities and Exchange Commission on Wednesday, the company and its creditors agreed that Mallinckrodt would enter bankruptcy under a restructuring agreement calling for the “permanent elimination” of the opioid settlement payments, except for a final $250 million payment. In a statement, Mallinckrodt officials indicated the company had the agreement of the trust to renegotiate the opioid settlement.
Mallinckrodt said it is operating normally and expects to emerge from its second bankruptcy by the end of this year “due to the overwhelming support of its key stakeholders.”
Mallinckrodt played a key role in saturating the United States with legal pain pills. Between 2006 and 2014, Mallinckrodt accounted for 27 percent of the opioid market compared with 18 percent for Purdue Pharma, measured by the potency of the pills they produced, according to a Washington Post analysis of drug data. According to the Drug Enforcement Administration, Mallinckrodt’s 30-milligram blue oxycodone tablet became the preferred drug on the street as the opioid crisis escalated. Internal documents released as part of the settlement agreement showed how the company aggressively sought to market its pills to doctors.
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