Bankruptcy court clears $397m Purdue consumer health sale

bankruptcy court
Sasun Bughdaryan

A judge in the US has approved the sale of Purdue Pharma’s consumer health business Avrio, part of the bankruptcy proceedings related to the drugmaker’s proposed $10 billion settlement of claims that it helped to fuel the opioid crisis in the US.

Following the ruling by Judge Sean Lane, who cleared the deal in a New York court yesterday, the business can now be sold to Atlantis Consumer Healthcare (a subsidiary of Arcadia Consumer Healthcare) for the sum of $397 million.

Avrio sells brands such as the Betadine antiseptic range, constipation remedies Senokot and Colace, and magnesium supplement Slowmag MG, and was put up for sale by Purdue last month. Atlantis was the only bidder for the business, according to court documents.

Purdue filed for bankruptcy protection in 2019 as a foundation of its attempt to resolve thousands of opioid lawsuits centred around the promotion and marketing of its OxyContin (oxycodone) painkiller, first approved in 1995, and is still trying to get its settlement offer over the line more than a year after raising the payout.

It is still facing holdouts from some states and districts, in many cases because they are unhappy with a clause in the settlement that will grant the Sackler family who own Purdue immunity from current and future civil lawsuits accusing them of contributing to the opioid epidemic.

The deal is also facing opposition from the Department of Justice’s US Trustee unit, which oversees bankruptcy proceedings and has staunchly resisted any settlement that will “deprive victims of the opioid crisis of their right to sue the Sackler family.”

If accepted, the settlement money will be directed to projects intended to support victims of the opioid crisis over a nine-year period, while Purdue’s assets will be transferred to a new company, not owned by the Sacklers, that will devote its profits to the prevention and treatment of opioid use disorder.

According to a Reuters report, Purdue’s creditors’ committee wants the company to use the proceeds of the Avrio sale to start fulfilling its pledge to compensate opioid victims and fund addiction recovery programmes.

A US District Judge blocked the proposed settlement towards the end of 2021, and Purdue subsequently lodged an appeal with the US Court of Appeals for the Second Circuit. So far, there is no indication when a ruling on that appeal may be forthcoming.

Photo by Sasun Bughdaryan on Unsplash.