Purdue Goes Bankrupt; Strikes At GM

Grind for September 20th

“It is difficult to free fools from the chains they revere.”

– Voltaire

It’s About Time

The Headline

Purdue Pharma reaches another settlement and files for bankruptcy

The Grind

Purdue Pharma filed for bankruptcy protection this Sunday as part of a $10 billion deal that settles roughly half of the 2,200+ lawsuits regarding its role in the opioid crisis.

“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” says Steve Miller, head of Purdue’s board of directors.

The Details

Purdue Pharma was founded in 1892 in New York and purchased by the Sackler family in 1952.

The company is famous for its painkiller OxyContin, an extended-release opioid first prescribed in 1996. In ads, OxyContin was described as “smooth and sustained pain control” lasting 12 hours. Officials claimed the drug was less addictive than other painkillers.

OxyContin is roughly 1.5 times stronger than morphine.

Purdue marketed its product to doctors by offering them incentives such as free trips and paid speaking engagements. By 2001, OxyContin had brought in nearly $3 billion in revenue.

Reports about addiction and abuse began to surface in 2000. In 2003, the DEA claimed that Purdue’s aggressive marketing methods had “very much exacerbated OxyContin’s widespread abuse.”

In 2004, West Virginia charged Purdue for ‘deceptive marketing.’ In 2007, Purdue was fined $600 million for misleading the public about OxyContin’s potential for addiction.

In 2012, the New England Journal of Medicine published a study which found that nearly 80% of those seeking help for heroin addiction had previously abused pharmaceutical narcotics – primarily OxyContin.

In 2016, as total revenue from OxyContin eclipsed $30 billion, an investigation revealed that Purdue’s executives had been aware of OxyContin’s potential for abuse from the very beginning.

The Takeaway

The settlement reached last week will see Purdue restructured as a public beneficiary trust, with all profits going to the plaintiffs. Purdue’s addiction treatment drugs will be provided to the public at no cost.

The Sackler family will forfeit ownership of the company, contribute $3 billion in cash, and sell its UK-based pharmaceutical network (Mundipharma) – but will remain wealthy and will not be criminally charged.

Plaintiffs who refused the terms of the settlement have promised to pursue further litigation to recover additional money from the Sackler family (much of which is believed to be held offshore). A recent filing by the New York attorney general’s office revealed nearly $1 billion in wire transfers from Purdue to the Sackler family.

According to Forbes, the family is worth nearly $13 billion.

“This apparent settlement is a slap in the face to everyone who was had to bury a loved one due to this family’s destruction and greed,” argues Pennsylvania Attorney General Josh Shapiro. “It allows the Sackler family to walk away billionaires and admit no wrongdoing.”


The Headline

Union strike at General Motors suspends work at 55 facilities

The Grind

More than 49,000 workers are participating in a strike that began late Sunday night when General Motors and the United Auto Workers (UAW) union failed to meet the deadline for negotiating a new four-year contract.

“We clearly understand the hardship that it may cause,” said UAW Vice President Terry Dittes. “We are standing up for fair wages, we are standing up for affordable quality healthcare, we are standing up for our share of the profits.”

GM employee Patty Thomas says that workers agreed to give up cost-of-living pay increases to help the company make it through bankruptcy. Now that GM is making money again, workers want to be reimbursed.

Other employees are frustrated by GM’s plans to close four factories in Detroit, Ohio, and Michigan.

“If we don’t fight now, when are we going to fight?” asks worker Dave Green, who transferred from Lordstown, Ohio to Bedford, Indiana after a factory was closed. “This is not about us. It’s about the future.”

The Details

Union reps say GM hasn’t budged, while GM says it offered higher wages, factory investments resulting in 5,400 new positions, improved health benefits, higher profit sharing, and an $8,000 payment to each worker.

GM also presented a plan that keeps two of the factories scheduled to close open (although work would be suspended for up to four years).

If the strike continues, it will suspend GM’s vehicle and parts production in the US and could affect production in Canada and Mexico.

Did you know… The people most often killed in robberies are the robbers.