Two big opioid cases suggest the U.S. bankruptcy process is unjustly providing relief for some while inflicting pain unnecessarily on others, according to a Reuters commentary. The first involves Mallinckrodt Pharmaceuticals, which may be headed for insolvency a second time. Between 2006 and 2014, it manufactured roughly 30 billion opioid pills. When states, Native American tribal governments and thousands of localities started suing all involved in the addictive medicine’s supply chain, from Johnson & Johnson to CVS Health, creditors decided the drugmaker would be better off resuscitated than sold off for parts. It emerged from chapter 11 in June 2022, agreeing to pay plaintiffs some $1.7 billion over eight years and warrants equal to a 20% stake in the company while sheltering executives including former CEO Mark Trudeau from legal liability. More notoriously, as recounted in multiple media outlets, books and TV series, closely held Purdue Pharma became a leader in the opioid market. Its attempt to climb out of bankruptcy has been stalled multiple times, most recently on Thursday by the U.S. Supreme Court. It agreed to let the Department of Justice make its case against attempts to grant protections to members of the Sackler family, who owned the company. As a result, the $6 billion they are contributing to a settlement is on hold.
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