Purdue Pharma may file bankruptcy over lawsuits

Oxycontin-maker Purdue Pharma is preparing for a possible bankruptcy filing as it faces hundreds of lawsuits over its role in the U.S. opioid epidemic, Reuters and the Wall Street Journal reported Monday.

The drugmaker has hired advisers to prepare for a potential filing, the Journal said, citing people familiar with the matter. Bankruptcy would let the company negotiate claims with some of the more than 1,500 cities, states, local governments and other entities that have sued Purdue and other health companies over their roles in the opioid epidemic.

Purdue spokesman Robert Josephson declined to comment on the reports.

“We are, however, committed to ensuring that our business remains strong and sustainable,” Josephson said in an email. “We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.”

The lawsuits against drugmakers and distributors have opened up the potential for billions of dollars in liabilities as governments grapple with mounting human and financial costs of the opioid epidemic.

On Monday, Purdue Pharma says a lawsuit filed against the company by the Massachusetts attorney general amounts to “oversimplified scapegoating” that is not supported by the law.

In a recent motion to dismiss the case, Purdue says Massachusetts Attorney General Maura Healey has created a “sensationalist and distorted narrative that ignores facts” in the lawsuit she filed last year. It alleges the company disregarded safety and addiction and deceived patients and doctors to get them to prescribe and take high doses of OxyContin and looked the other way as overdose deaths linked to prescription opioids soared.

Purdue alleges that some claims made by Healey are contradicted by the Massachusetts Department of Health and the FDA, which approved the medication and its labeling. Purdue argues that Healey is putting forward a “misleading narrative” about OxyContin.

Healey’s office said it plans to oppose Purdue’s motion.

In the suit, Healey argues that Purdue encouraged sales representatives to push extremely high doses of the drug to boost OxyContin profits. Purdue counters that the FDA has approved various dosages of the medication, which allow doctors to easily tailor how much medication a patient is taking. Purdue said that the company has issued warnings about the side effects of high OxyContin doses and that it advises patients start with low doses.