Mallinckrodt has officially been sunk by mounting opioid litigation costs.
This week, the company filed for Chapter 11 bankruptcy protection in Delaware, citing “significant litigation and debt issues.” The move will allow the UK-based drugmaker to implement a restructuring plan that gives ownership to bondholders, wipe out shares, and resolve two upcoming trials over complaints that the company improperly marketed and distributed opioids.
As part of the move, Mallinckrodt will pay $1.6 billion over several years to settle opioid-related lawsuits. It will also help settle claims that the company overcharged Medicaid programs to a multiple-sclerosis drug, H.P. Acthar gel.
Mallinckrodt joins Purdue Pharma and Insys Therapeutics as the third company to go bankrupt over opioid-related lawsuits.
