In a new settlement, the largest generic opioid manufacturer in the United States will pay $1.6 billion into a trust that will go towards abating the opioid crisis, attorneys general from several states said on Friday.
Under the agreement, Mallinckrodt (MNK) will pay $450 million into the trust upon emerging from bankruptcy and then pay $200 million annually for the first and second year out of bankruptcy. For five years after that, the company will pay $150 million annually.
Additionally, MNK agreed that its opioid business will be subject to stringent injunctive relief that will prevent marketing and ensure systems are in place to prevent drug misuse.
“This agreement is a significant step toward helping those victimized by one of the worst man-made epidemics in our state’s history,” said Texas Attorney General Ken Paxton. “My office has been aggressively working to hold opioid manufacturers accountable for their deceptive marketing of highly-addictive pain pills, which spurred an epidemic and left victims and families with unimaginable consequences. My office will continue to do everything it can to protect Texans and help our state heal from this crisis.”
The agreement covers lawsuits brought against the company by 50 states attorneys general and other local subdivisions.
“This is a significant development in our efforts to provide relief to Hoosiers who have been hurt by the unprecedented opioid crisis,” Indiana Attorney General Curtis Hill said. “Opioid misuse and addiction continues to afflict the people of Indiana, and we will continue to do everything in our power to mitigate the effects of this urgent and tragic public health emergency.”
It was not immediately clear how much money each state would receive, how the money would be distributed, or how the trust will be administered.
The new settlement improved a previous deal in February by moving $150 million from the last payment to the first. Since the February settlement, MNK has declared bankruptcy due to other legal issues and the impact of COVID-19. As a result, the February agreement had to be renegotiated.
“The enhancements to this already strong, global agreement will ensure more money flows to states more quickly to stop the death and destruction brought on by the national opioid crisis. … By holding Mallinckrodt accountable for its role in exacerbating the opioid crisis, we move closer to our goal of ending this epidemic and bringing relief to the Florida communities affected,” Florida’s Attorney General Ashley Moody said.