One of the largest opioid distributors, Mallinckrodt, has agreed to pay $1.6 billion as a settlement for the thousands of lawsuits faced by it over the opioid crisis.
As per the proposed agreement, plaintiffs would receive warrants for 20 percent of the company’s outstanding shares. Mallinckrodt will pay the money of the settlement to a trust for eight years and enter its generic business into Chapter 11 bankruptcy. The settlement will clear all the opioid claims against the company.
The agreement has got approval by 47 states and territory attorneys general, but still, thousands of municipalities who sued the manufacturers over the opioid crisis are yet to reach the agreement. The settlement came after more than 20 attorneys signed a letter rejecting an $18 billion settlement deal proposed by three of the nation’s biggest opioid distributors.
The agreement can help in the settlement with several other companies as Mallinckrodt is the first company to reach a tentative global agreement in the Cleaveland case. It can also lead to global settlements of all claims, as informed by U.S. District Judge Dan A. Polster, who is overseeing the Cleveland case.
Opioids are on the market for ages and have been used basically for pain relief for post-surgical pain, cancer-related pain, chronic or persistent pain. Opioids when used in proper dosage and along with a combination of other pain treatments, work in relieving pain successfully, unless there is a misuse or abuse of the drug.
Companies manufacturing opioids convinced the medical community that these medications were not addictive and were purely beneficial. This belief raised the number of prescriptions and sales unwarrantedly, resulting in a mass misuse of these drugs, to the extent that this was identified by the U.S. Food and Drug Administration (FDA) as a public issue and named it an opioid crisis.
