Commonwealth of Virginia
Office of the Attorney General
202 North Ninth Street
For media inquiries only, contact:
Charlotte Gomer, Press Secretary
Mobile: (804) 512-2552
ATTORNEY GENERAL HERRING REACHES UPDATED SETTLEMENT WITH OPIOID MANUFACTURER MALLINCKRODT
~ Herring announced initial settlement with Mallinckrodt back in February 2020 ~
RICHMOND – Attorney General Mark R. Herring 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 cover the costs of opioid addiction treatment and related efforts. MNK is currently the largest generic opioid manufacturer in the United States. Attorney General Herring announced the initial settlement in back in February.
"The ongoing opioid crisis has its roots in the boardrooms and marketing offices of pharmaceutical manufacturing companies like Mallinckrodt, where executives chose to put profits over human lives,” said Attorney General Herring. "Families and communities in Virginia and around the country have felt the devastating effects of the opioid epidemic. No dollar amount will bring back the loved ones lost to the opioid crisis, but settlements like this one with Mallinckrodt will hold those companies accountable for the role they played in creating and prolonging this epidemic.”
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
- $150 million annually on third through seventh anniversaries of emergence from bankruptcy
MNK also agrees that its opioid business will be subject to stringent injunctive relief that, among other things, will prevent marketing and ensure systems are in place to prevent drug misuse.
This payment schedule improves the February deal 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.
This settlement comes as part of a bipartisan, multistate effort to investigate and hold opioid manufacturers and distributors accountable for their role in the opioid crisis.
Attorney General Herring has filed suit against Purdue Pharma and members of the Sackler Family, as well as fentanyl manufacturers Teva and Cephalon as part of his ongoing efforts to hold pharmaceutical companies accountable for the role they played in creating and prolonging the opioid crisis.
The heroin and prescription opioid epidemic has been a top priority for Attorney General Herring. He and his team continue to attack the problem with a multifaceted approach that includes enforcement, education, prevention, and legislation to encourage reporting of overdoses in progress, expand the availability of naloxone, and expand access to the Prescription Monitoring Program. He has supported federal efforts to improve the availability of treatment and recovery resources and made prescription drug disposal kits available across the Commonwealth.
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