Mallinckrodt filed for bankruptcy protection on Monday, saddled with lawsuits alleging it fueled the U.S. opioid epidemic and after it lost a court battle to avoid paying higher rebates to state Medicaid programs for its top-selling drug.
The company listed both assets and liabilities in the range of $1 billion to $10 billion in a filing with the U.S. Bankruptcy Court for the District Of Delaware.
More than 3,000 lawsuits have been filed accusing drug manufacturers of engaging in deceptive marketing that promoted the use of addictive painkillers, fueling an epidemic that since 1999 has resulted in more than 450,000 overdose deaths.
The company had in February said it planned to have its generic drug business file for bankruptcy as part of a tentative $1.6 billion opioid settlement to resolve claims by state attorneys general and U.S. cities and counties.
It further warned on Aug. 4 the parent company and other units may also seek bankruptcy protection after a judge allowed the federal government to force it to pay higher rebates to state Medicaid programs for its multiple-sclerosis drug H.P. Acthar Gel.
Its per-vial price has risen from about $50 in 2001 to $38,892 in 2019 and it generated 30.1% of the company's net sales last year.
The drugmaker said it will implement a restructuring support agreement that would provide for an amended proposed opioid claims settlement and a financial restructuring.
"The company has agreed to pay $260 million over seven years and reset Acthar Gel's Medicaid rebate calculation as of July 1, 2020, such that state Medicaid programs will receive 100% rebates on Acthar Gel Medicaid sales, based on current Acthar Gel pricing," Mallinckrodt said in a statement.
During the bankruptcy protection, the company said it aims to resolve opioid-related claims and to reduce its debt by about $1.3 billion, while surviving on cash on hand and cash generated from operations.