Purdue reaches an interim agreement with US cities, declares over opiate sales

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Purdue acknowledged that its marketing in the United States of its prescription painkiller OxyContin was misleading.

The Associated Press

Purdue Pharma and its owners have reached a multi-billion dollar interim agreement with US local and state governments that would solve thousands of lawsuits against a company accused of feeding the deadly opioid epidemic in North America.

According to the proposed agreement, Purdue should file for Chapter 11 bankruptcy and dissolve the company as it is now, according to the New York Times reported on Wednesday. The Sackler family, which owns the company, would have contributed $ 3 billion in cash to the settlement over seven years.

It is not known how the imminent declaration of bankruptcy of the parent company will affect the legal actions taken against Purdue in Canada.

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The proposed agreement puts an end to the weeks of speculation that revolve around Purdue's solvency and comes as the first federal trial against opiate producers and distributors should begin next month in Cleveland.

Purdue acknowledged in the United States that the marketing of its prescription painkiller OxyContin was misleading, with the company and three of its top executives paying a total of $ 634.5 million in 2007 to liquidate civil and criminal charges.

Purdue's Canadian operation did not admit such offenses.

On Wednesday, Purdue Pharma in Canada reiterated that it is a company separate from its American counterpart.

"Any decision by Purdue Pharma L.P.P. to negotiate an agreement in the United States would not directly affect our business," reads a statement by spokeswoman Lisa Joyce. "We have no knowledge about this negotiation."

The proposed agreement is the first global agreement, negotiated by a team of lawyers representing nearly 2,300 legal actions in federal court, as well as by lawyers for states. The resolution would end almost all cases against Purdue.

In Canada, the British Columbia government in 2018 initiated a lawsuit against dozens of opioid industry players for their role in an overdose crisis that devastated communities across the country. B. C. Attorney General David Eby announced last month that the case now has the support of other provinces.

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Asked about any impact of a declaration of bankruptcy of Purdue on the provincial legal action, a spokesman for Mr. Eby said: "We are unable to comment on this question."

The provinces aim to recover the costs of public health care from pharmaceutical operators for their role in an overdose crisis that killed thousands of Canadians. The lawsuit accuses brand and generic manufacturers of misleadingly marketing opioids because both create less dependence than is actually known and for conditions that were not effective in treatment.

More than 11,500 Canadians have died due to an opioid-related overdose between January 2016 and December 2018.

The Canadian opiate epidemic has its roots in the mid-1990s, with the introduction of OxyContin.

Health Canada in 1996 approved the drug to relieve moderate to severe pain; until then, opioids had been used primarily for the severely ill and terminally ill. Canada is the world's second highest per capita consumer of prescription opioids after the United States.

OxyContin was the longest-selling opioid for over a decade, generating over Purdue for over $ 30 billion. At the same time, however, reports of addiction and overdose have increased between those who have been prescribed the drug and those who have illegally used diverted pills. Purdue has promoted OxyContin in North America as safer and less compelling than other opioids, encouraging doctors to prescribe it more widely for everything from back pain to fibromyalgia.

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Last year, Purdue stopped marketing its opioids in Canada, in response to the federal government urging pharmaceutical companies to suspend opioid-related marketing activities.

A proposed national settlement in Canada, which closes a ten-year legal battle involving Purdue, has been in limbo for more than a year after two judges rejected it.

A Saskatchewan judge rejected the agreement, stating that the $ 18 million compensation Purdue has agreed to pay is neither fair nor reasonable for people who have become addicted after their doctors have prescribed it. A second Saskatchewan judge stated that the process followed to assign another 2 million dollars to the provinces and territories, which were also part of the cause, was "full of problems".

Last Thursday, Saskatchewan chief judge Martel Popescul reserved the right to decide whether to proceed with a new approval hearing and, if so, under what conditions.

"We are closely following the evolving situation in the United States," said Joel Rochon, a Toronto lawyer who represents patients.

With a report by Andrea Woo in Vancouver

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