New York (CNN Business)Mallinckrodt Pharmaceuticals, facing billions of dollars in legal costs over its role in the nation’s opiod crisis, filed for bankruptcy early Monday.
The largest generic opioid manufacturer in the United States is losing battles on multiple fronts. A recent court decision could force Mallinckrodt to pay hundreds of millions of dollars in higher rebates to state Medicaid programs for its best-selling drugs. Last year, the Justice Department filed suit against the company, charging that it knowingly paid illegal kickbacks as part of an elaborate scheme to make millions of dollars and stick the American taxpayer with the bill.But the most expensive problem Mallinckrodt (MNK) faces are lawsuits charging it with helping to feed the nation’s opiod crisis. In February, it reached an agreement in principle on a $1.6 billion settlement with attorneys general for 47 states and US territories.
The company said it intends to use bankruptcy to “provide a fair, orderly, efficient and legally binding mechanism” that provides for an amended proposed opioid claims settlement and a financial restructuring that would settle its other legal woes.The Dublin, Ohio, based company had 3,400 employees as of the end of last year, and had revenue of $3.2 billion in 2019, but net losses of nearly $1 billion.Read More
The Sackler family withdrew more than $10 billion from Purdue Pharma during the country's opioid crisisLast year another opioid maker, Purdue Pharma, filed for bankruptcy as it sought a settlement on claims against it for its role in the opioid crisis. The bankruptcy process allows companies to shed debt and other liabilities and stay in business.
Source: edition.cnn.com