Mallinckrodt, the largest maker of generic opioids, filed for bankruptcy on Monday as it faces more than $1 billion in costs from lawsuits over its role in fueling the opioid crisis.
The company in February agreed to the framework of a $1.6 billion settlement with 47 attorneys general from states and territories over opioid-related lawsuits.
On Monday, the company detailed a structure for making those settlement payments, beginning with a $450 million payment upon emerging from bankruptcy proceedings.
“For years, they balanced their business on the backs of a product they knew was dangerous and deadly,” Connecticut Attorney General William Tong said in a statement on Monday. “As Mallinckrodt now collapses and files for bankruptcy, this agreement ensures $1.6 billion will be placed in a trust and used to directly address the pain, suffering and trauma caused by the opioid epidemic.”
The company is also agreeing to terms to prevent it from marketing its opioids in the future and to put in place protections aimed at preventing abuse.
The company said it would continue to serve customers “as normal” during the bankruptcy proceedings.
The company is also agreeing to pay $260 million over disputes about its pricing of its multiple sclerosis drug Acthar Gel.
Purdue Pharma, another major opioid maker, also filed for bankruptcy last year as part of a settlement to resolve opioid lawsuits against it.