Bankruptcy Settlement: The US and Drugmaker Endo agree a $465 million deal

The U.S. Department of Justice announced on Thursday that bankrupt pharmaceutical company Endo International would pay up to $465 million to resolve claims made by the federal government about taxes, healthcare costs, and law enforcement.

Bankruptcy Settlement: The US and Drugmaker Endo agree a $465 million deal

With the settlement, Endo’s biggest roadblock to fulfilling its bankruptcy plan to sell assets to its creditors is removed. At a court hearing on March 19, Endo will request permission from a U.S. bankruptcy judge to proceed with the sale and enable the firm to exit from bankruptcy, according to the DOJ.

Endo declared bankruptcy in August 2022 in order to pay off its $8 billion debt and numerous lawsuits stemming from their purported involvement in the opioid crisis in the United States. The business has consented to stop pushing opioids to prescribers and to pay settlements totaling approximately $600 million to states and individuals affected by the opioid crisis as part of its bankruptcy restructuring.

On Thursday, Southern District of New York U.S. Attorney Damian Williams stated that filing for bankruptcy is not a “free pass to evade responsibility for criminal misconduct, civil fraud, or taxes.”

According to Williams, the DOJ settlement upholds Endo’s prior commitments to pay for state and local opioid addiction treatment programmes and to compensate those affected by the opioid crisis. It also guarantees that Endo accepts accountability for its prior wrongdoing.
Endo has committed to paying the government $364.9 million over a ten-year period, plus an additional sum up to $100 million dependant on the success of its operations following its bankruptcy filing. Endo may choose to accept a reduced, one-time payment of $200 million as soon as it emerges from bankruptcy thanks to the settlement.

The deal addresses almost $7 billion in claims that the DOJ had made against Endo for alleged tax debts, a DOJ criminal investigation into its opioid marketing, and the federal government’s potential overpayment for Endo pharmaceuticals. Endo gave a preview of the settlement in a November court filing.

Regarding its previous marketing of the opioid medication Opana ER, Endo subsidiary Endo Health Solutions Inc. (EHSI) also consented to enter a guilty plea to a misdemeanour. EHSI, which discontinued offering Opana ER in 2017, will enter a guilty plea to charges of selling counterfeit medications in violation of the Federal Food, Drug and Cosmetic Act (FDCA).

The U.S. Centers for Disease Control and Prevention released information indicating that about 645,000 individuals died from opioid overdoses between 1999 and 2021, and preliminary data indicates that the number of overdose deaths continued to be high in 2022 and 2023.

Thousands of lawsuits against businesses purportedly involved in the opioid crisis have been brought by states, municipalities, hospitals, and private citizens; as a result, drug manufacturers, distributors, and retail chains have settled for more than $50 billion.

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