Drugmaker Mallinckrodt may renege on $1.7 billion opioid settlement
STEVE INSKEEP, HOST:
One of the big national opioid settlements appears to be unraveling. It's worth more than $1.7 billion. A company called Mallinckrodt that manufactured generic pain medications says it may stop making payments to communities and opioid victims. NPR addiction correspondent Brian Mann has more.
BRIAN MANN, BYLINE: During the years when prescription opioid addiction and overdoses were surging, Mallinckrodt, based in Ireland, wasn't a name brand. But the company fed the booming market with less expensive generic pain medications. Hit with a tsunami of opioid-related lawsuits, Mallinckrodt filed for bankruptcy. As part of that first Chapter 11 filing last year, the company eventually reached a settlement with tens of thousands of communities and victims. In a statement at the time, the firm claimed the deal significantly improved its financial position. But in a new filing with the Securities and Exchange Commission, Mallinckrodt says it's considering filing for bankruptcy again.
JOSEPH STEINFELD: It could be devastating. It potentially could wipe out the whole settlement.
MANN: Joseph Steinfeld is an attorney representing victims of the opioid crisis. He says it's clear Mallinckrodt is still struggling financially. If Mallinckrodt moves forward with a second reorganization, he says opioid victims will likely find themselves pushed to the end of a long line of creditors, behind investors and employees.
STEINFELD: Paying board members, paying the company professionals and paying non-victims is all well and good, but it ignores the whole fact that the persons most harmed and the reason the company is in bankruptcy is because of the damage they've done.
MANN: This development means new uncertainty for families hit by the opioid crisis that have already waited years for compensation. Katherine Scarpone, who is among those expecting a payment from Mallinckrodt, says today is the anniversary of her son's death.
KATHERINE SCARPONE: It'll actually be eight years that I lost my son.
MANN: Joe Scarpone, a former Marine, died from an opioid overdose after developing an addiction using prescription pain medications, including those made by Mallinckrodt. His mom, Katherine Scarpone, helped negotiate the first bankruptcy settlement last year. She says the threat it might unravel after so much work is heartbreaking.
SCARPONE: First is the victim, right? Some lose their lives, some don't. And then there's the bankruptcy of having to go through all that painful stuff of filing. And then to have that all blow up, it's just - it's really - it really angers me.
MANN: A spokesperson for Mallinckrodt declined NPR's request for comment. The next test of the company's intentions is expected within days. In the SEC filing, the company acknowledges receiving letters from creditors, pressuring it to withhold a $200 million opioid payment scheduled for Friday. The board is actively evaluating the situation and considering options, Mallinckrodt said in its filing, adding there can be no assurance of the outcome of this process.
The unraveling of this opioid settlement comes as communities around the U.S. are poised to receive more than $50 billion in payments promised by corporations that made and sold pain medications. Some money will go to victims, but the lion's share will go to communities to help fund addiction treatment and health care programs designed to ease the opioid epidemic, which killed another 110,000 Americans last year. Experts interviewed by NPR say Mallinckrodt's financial woes are unique and don't cast a shadow over those wider opioid settlements.
Brian Mann, NPR News.
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