Mallinckrodt Becomes Third Pharmaceutical Company to File Bankruptcy Over the Opioid Crisis

As Mallinckrodt Pharmaceuticals was preparing for two trials over its role in the nation’s opioid crisis, the drug company filed for Chapter 11 bankruptcy protection. Now, judges are unlikely to allow litigation outside of bankruptcy court — at least until the company’s restructuring plan makes it through bankruptcy proceedings.

The Equivalent Of A Drug Dealer

Mallinckrodt faces countless allegations of fueling the United States opioid epidemic. Individuals, families, cities, counties, and states have all come forward with claims against the company. Bloomberg covers one court filing made after a local baby was born addicted to Mallinckrodt’s pills:

“Tennessee officials and lawyers for an opioid-addicted baby contend the company acted as the equivalent of a drug dealer when it shipped large orders that wound up supplying some pill mills in the state.”

Further, plaintiffs have alleged the company failed to supervise its salespeople and engaged in deceptive marketing that promoted the use of addictive painkillers. For example, one sales manager compared Mallinckrodt’s dangerous medications to Doritos and sent an email urging customers to “keep eating, we’ll make more.”

Since 1999, the opioid epidemic has resulted in more than 450,000 overdose deaths.

$1.6 Billion To Resolve All Opioid Litigation

The company’s restructuring plan sets aside $1.6 billion to resolve all opioid litigation. Mallinckrodt will also set up a trust to oversee payments to claimants. Critics of the plan argue that the company has run to bankruptcy court to avoid upcoming trials and worry that the “paltry settlement funds” will leave rural areas without compensation.

In its Chapter 11 filing, the company estimated up to $10 billion of liability in opioid claims, so $1.6 billion may not be sufficient in settling all pending litigation.

Worse, the plan will allow Mallinckrodt to stay in business. Not only did this company allegedly fuel the opioid epidemic, but Mallinckrodt is also facing a government probe to determine whether or not it defrauded Medicaid by overcharging for a multiple sclerosis drug called Acthar Gel.

Other opioid manufacturers that have filed for bankruptcy to avoid financial ruin in the fallout of the epidemic include Purdue Pharma, which will pay approximately $13 billion to deal with the public health crisis, and Insys Therapeutics Inc, maker of the highly addictive opioid-based painkiller, Subsys.

What Mallinckrodt’s Bankruptcy Means for Plaintiffs

If you have a claim against Mallinckrodt, your lawsuit may be on hold until the company’s bankruptcy plan makes it through court. Afterward, you may be entitled to a settlement from Mallinckrodt’s $1.6 billion opioid litigation fund.

To find out how much money you may be entitled to and fight for the compensation you deserve, schedule a free consultation with Casey Law Offices.

We are available 24/7 at (414) 272-5564 and online — call or click to put more than 25 years of legal experience on your side.