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Drugmaker Mallinckrodt reaches $1.6B opioid settlement with Florida, other states

It wasn’t immediately clear how much of the money was heading to Florida, or when.
FILE- In this July 1, 2013 file photo, is the exterior of the Mallinckrodt Pharmaceuticals office in St. Louis. The generic drugmaker Mallinckrodt has a tentative $1.6 billion deal to settle lawsuits over its role in the U.S. opioid crisis, it announced Tuesday, Feb. 25, 2020. The deal is intended to end hundreds of lawsuits faced by the company over opioids. (Whitney Curtis/AP Images for Mallinckrodt, File) [WHITNEY CURTIS | AP]

The generic drugmaker Mallinckrodt has a tentative $1.6 billion deal with Florida and dozens of other states to settle lawsuits over its role in the U.S. opioid crisis, it announced Tuesday.

The deal is intended to end hundreds of lawsuits faced by the company over opioids.

The company said that it had an agreement with a key committee of lawyers representing thousands of local governments suing various drug industry players over opioids — and that the deal has the support of the attorneys general of 47 states and territories.

Mallinckrodt was one of several opioid makers and distributors sued by former Florida Attorney General Pam Bondi in 2018. In September, Bondi’s successor, Ashley Moody, announced a tentative agreement with Purdue Pharma, maker of the opioid Oxycontin.

Moody called the deal with Mallinckrodt“a step in the right direction towards providing relief for victims and protecting Floridians.” She said the opioid crisis is killing 15 Floridians a day.

“These opioid pill manufacturers deceived the public in their marketing of these highly addictive, sometimes lethal, drugs,” Moody said in a statement.

Related: Florida cities sued opioid makers. Now lawmakers might go after the cities.

It wasn’t immediately clear how much of the $1.6 billion was heading to Florida, or when.

Mallinckrodt, based in Staines-Upon-Thames, England, was one of the highest-volume opioid producers in the U.S. at the height of the nation’s prescription drug crisis, shipping 2.3 billion pills from 2006 to 2014, according to federal data.

In 2010 alone, Mallinckrodt’s SpecGX subsidiary, shipped 210 million doses of oxycodone to Florida, then the epicenter of the black market opioid trade. The company’s potent 30 milligram pills were especially sought after by people with addiction.

Documents gathered as the company prepared for trial showed that a Mallinckrodt sales manager told a distributor in 2009 of the pills: “Just like Doritos; keep eating, we’ll make more.” A company spokesman later called the statement “outrageously callous.”

The company argued in court filings that unlike makers of brand-name drugs, it did not promote opioids to doctors or understate the addiction risks. But plaintiffs in the cases said Mallinckrodt continued to ship suspicious orders without making sure the drugs weren’t going to be diverted to the black market.

Under its agreement, Mallinckrodt is filing for bankruptcy. The plan calls for it to make payments for eight years after the company emerges from the protections. That route is similar to one OxyContin maker Purdue Pharma is taking to settle opioid claims against it.

Related: ‘Privacy’ fears? Florida lawmakers use old argument against attorney general’s opioid bill

For Mallinckrodt, there are business concerns, beyond the potential liability in opioid cases, that contributed to its seeking bankruptcy protection.

“Reaching this agreement in principle for a global opioid resolution and the associated debt refinancing activities announced today are important steps toward resolving the uncertainties in our business,” Mark Trudeau, president and CEO of the company, said in a statement.

Joe Rice, a lawyer on the executive committee of plaintiffs suing in federal court over opioids, said in an interview Tuesday that some details of the Mallinckrodt agreement still remain to be ironed out.

Most of the money contributed by Mallinckrodt would go to a trust to pay for addiction treatment and other costs related to an opioid crisis that has been linked to more than 430,000 deaths in the U.S. since 2000. Additionally, the trust would be able to buy Mallinckrodt stock at a fixed price; it could be sold to help the cause.

Mallinckrodt’s announcement comes weeks before a trial on the toll of opioids is scheduled to start in Central Islip, New York. The looming trial has been a factor in a ramped-up push for other drugmakers and distributors to settle, as well.

There have been increasingly public tensions between attorneys general and the private lawyers for local governments over the biggest of the proposed settlements, which would involve at least the three biggest U.S. drug distribution companies. States have also been divided on whether to accept the deal, under which the distributors would pay a total of $18 billion over 18 years.

Times/Herald staff writer Lawrence Mower contributed to this report.

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