Mallinckrodt offers up generics business for bankruptcy in $1.6bn opioid deal
Amidst the opioid crisis in North America, a number of manufacturers involved in the marketing of opioid-based painkillers are now fielding lawsuits.
Amongst them is Mallinckrodt, which has already reached settlement agreements in Ohio, US, and is now seeking to resolve all further cases against it, whilst rendering it immune from additional action due to a ‘channelling injunction.’
The company’s potential action to conclude cases against it would see Mallinckrodt pay plaintiffs $1.6bn (€1.45bn) in structured payments, with the company noting that the ‘substantial majority’ of the capital would be provided to the creation of an abatement fund – to cover the provisions of opioid-addiction treatments and related measures.
In order to follow through on this proposal, the company stated that it “expects that specialty generics, which manufactures certain generic opioid products, among other products, will file voluntary petitions under Chapter 11 of the US Bankruptcy Code in the coming months.”
Should the plaintiffs accept the provisional agreement of bankruptcy, Mallinckrodt would become the second major opioid manufacturer to take this route in reaction to lawsuits, with Purdue Pharma previously reaching a similar agreement and pledging to commit $10bn towards combatting the opioid crisis.
The main part of Mallinckrodt’s remaining business, specialty brands, which had only been recently separated from the business, and all of the company’s remaining subsidiaries, would not be part of the bankruptcy filing.
Mallinckrodt CEO, Mark Trudeau, released a statement suggesting that the agreement in principle goes someway to ‘resolving the uncertainties’ surrounding the business, as well as providing “a clear path forward to achieving our long-term strategy.”
Part of the company’s overall strategy has been to refine the business, amid the opioid lawsuits, as it instigated the sale of its contract development and manufacturing organization (CDMO) subsidiary.
