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Endo to Pay $465M in Bankruptcy Settlement

Endo to Pay $465M in Bankruptcy Settlement

Endo to Pay $465M in Bankruptcy Settlement


Bankrupt drugmaker Endo International is set to pay up to $465 million to settle various federal claims, including law enforcement, tax, and healthcare costs, according to the U.S. Department of Justice (DOJ).
The settlement is a significant development, removing a major obstacle for Endo to finalize its asset sale to lenders during bankruptcy proceedings. The pharmaceutical company filed for bankruptcy in August 2022, aiming to address its $8 billion debt and resolve numerous lawsuits linked to its alleged involvement in the U.S. opioid epidemic.
As part of its bankruptcy restructuring, Endo has committed to paying around $600 million in settlements to states and individuals affected by the opioid crisis. This includes discontinuing the promotion of opioids to prescribers.
The U.S. Attorney for the Southern District of New York emphasized that bankruptcy does not exempt companies from accountability for criminal misconduct, civil fraud, or taxes. The DOJ settlement holds Endo accountable for past misconduct, ensuring compliance with previous agreements to fund state and local opioid addiction treatment programs and provide compensation to those harmed by the opioid epidemic.
Under the terms of the settlement, Endo will pay the government $364.9 million over ten years, with a contingent payment of up to $100 million based on the company's post-bankruptcy business performance. Alternatively, Endo can opt for a lower, one-time payment of $200 million upon exiting bankruptcy.
This settlement resolves claims exceeding $7 billion related to purported tax debts, a criminal investigation into Endo's opioid marketing practices, and potential overpayment by the federal government for Endo medications. Additionally, Endo's subsidiary, Endo Health Solutions Inc (EHSI), will plead guilty to a misdemeanor for its previous marketing of the opioid drug Opana ER, acknowledging violations of the Federal Food, Drug, and Cosmetic Act.
The opioid crisis has been a significant public health concern, with nearly 645,000 deaths from opioid overdoses reported between 1999 and 2021. Preliminary data indicates that overdose deaths remained elevated in 2022 and 2023, underscoring the ongoing severity of the crisis.
The settlement aligns with the broader legal landscape surrounding the opioid epidemic, where states, local governments, hospitals, and individuals have pursued legal action against companies accused of contributing to the crisis. The collective settlements with drugmakers, distributors, and pharmacy chains have exceeded $50 billion.
The resolution of Endo's claims is a critical step in its bankruptcy proceedings, allowing the company to proceed with its asset sale and emerge from bankruptcy.


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