Leading opioid manufacturer Mallinckrodt Pharmaceuticals has filed for bankruptcy, which would reduce their payment to victims of the opioid crisis by $1 billion dollars.
Mallinckrodt was the largest generic opioid manufacturer in the United States when it filed for its first bankruptcy in 2020. The company's ruthless promotion and sale of opioids earned it the title of "the kingpin within the drug cartel" by the Drug Enforcement Administration. Facing a series of mass lawsuits over its contributions to the opioid crisis, the pharmaceutical giant agreed to settle for $1.7 billion over the course of 8 years.
Opioid Manufacturer files for Bankruptcy
The $1.7 billion settlement was intended to be paid to a trust which would aid in recovery for victims of the opioid crisis, including covering the costs of opioid addiction treatment. The process of healing has been ravaged by Mallinckrodt's second bankruptcy filing, which slashed most of the remaining $1.25 billion in remedial payments. Now, the company plans to pay only $250 million to its victims, prioritizing repayment to hedge fund lenders instead.
“Nothing can undo the devastating loss and grief inflicted by the opioid epidemic upon victims and their families, but this settlement with Mallinckrodt is an important step in the process of healing our communities,” California Attorney General Xavier Becerra said of the settlement in a statement.
“What was promised was a significant amount to many of the victims that were counting on it,” Joseph Steinfeld, a lawyer representing thousands of victims included in the settlement, told The New York Times. “They’re losing about 70 percent of what they were promised.”
In 2017, Mallinckrodt agreed to another opioid-related settlement for its failure to notify the Drug Enforcement Administration of "suspicious orders," which resulted in millions of oxycodone pills being sold on the street. Other companies like Purdue Pharma have also come under fire for playing major roles in the opioid crisis.
According to the CDC, opioid-related overdoses killed more than 80,000 people in 2021. Prescription opioids, heroin, and synthetic opioids like fentanyl accounted for over 75 percent of all drug overdose deaths that year.