Attorney General Phil Weiser announces updated settlement with opioid manufacturer Mallinckrodt
Oct. 12, 2020 (DENVER, Colo.)—Attorney General Phil Weiser today announced an update to a global settlement framework agreement between state attorneys general, local subdivisions, and the opioid manufacturer Mallinckrodt (MNK), its subsidiaries, and certain other affiliates. Under the new settlement, MNK will pay $1.6 billion into a trust that will go to the states to address the opioid epidemic. MNK is currently the largest generic opioid manufacturer in the United States.
“The opioid epidemic has destroyed thousands of lives and families in communities throughout Colorado. Today’s settlement agreement with Mallinckrodt is part of our efforts to hold those who contributed to this epidemic accountable and to put in place necessary protections. While we still need to negotiate how much Colorado will receive from this national settlement with MNK, the funds will support urgently needed drug treatment and recovery pathways in our state,” said Weiser.
MNK will pay $1.6 billion of cash into a trust that will go toward abating the opioid crisis, including valid claims related to MNK’s role in the opioid crisis raised by non-governmental claimants. MNK will pay the $1.6 billion according to the following schedule:
- $450 million upon emergence from bankruptcy;
- $200 million annually on first and second anniversary of emergence from bankruptcy; and
- $150 million annually on third through seventh anniversaries of emergence from bankruptcy.
MNK also agrees that its opioid business will be subject to stringent court-ordered requirements that, among other things, will prevent promotion of opioids and ensure systems are in place to prevent drug misuse.
This payment schedule improves the deal announced in February by moving $150 million from the last payment to the first. Since the February settlement, MNK has taken on additional liability due to other legal issues and the impact of COVID-19. As a result, MNK is now putting the entire company into bankruptcy, which requires that the February agreement be renegotiated.
Details about how much each state will receive, how the money will be distributed, and how the trust will be administered are all still being negotiated.
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