Attorney General Wilson Announces Updated Settlement with Mallinckrodt
Tuesday, October 20th, 2020
Attorney General Alan Wilson 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 as described below. MNK is currently the largest generic opioid manufacturer in the United States.
“While the opioid crisis continues to claim the lives of South Carolinians, this improved agreement with MNK represents an important step in my Office’s ongoing efforts to hold accountable those who are responsible for the epidemic,” said Attorney General Wilson. “My Office will continue to work tirelessly to obtain resources for the State to help combat this crisis.”
MNK will pay $1.6 billion 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 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.