The pharmaceutical company responsible for OxyContin announced Friday that it has officially shut down operations and finished its bankruptcy process, transforming into a nonprofit organization dedicated to fighting opioid addiction under new leadership featuring government and healthcare professionals.
The company, which entered Chapter 11 bankruptcy proceedings in 2019, had previously outlined plans to become the new nonprofit entity Knoa Pharma through a $7.4 billion bankruptcy agreement designed to direct all company resources toward addressing opioid crisis damages. Thousands of legal cases targeted the pharmaceutical giant for its contribution to America’s opioid epidemic, and the company has admitted guilt twice to federal criminal charges related to OxyContin marketing practices.
The completion of the company’s criminal sentencing earlier this week cleared the last obstacle for implementing the bankruptcy restructuring plan.
During Tuesday’s sentencing proceedings, numerous opioid crisis survivors shared personal accounts of addiction struggles, family losses, and heartbreak. Court documents reviewed by Reuters and victim interviews highlighted significant dissatisfaction with the bankruptcy settlement’s complicated payment process for those harmed, with approximately 40% of individual compensation requests already denied.
In 2020, the company admitted guilt to charges involving misleading federal oversight agencies about efforts to prevent illegal OxyContin abuse and acknowledged providing financial incentives to physicians to increase drug prescriptions. This followed a previous 2007 guilty plea for deceiving medical professionals and regulators about OxyContin’s addictive properties.
The new nonprofit’s board of trustees features Rahul Gupta, former director of the White House Office of National Drug Control Policy during the Biden administration; Paul Rothman, previous Johns Hopkins University School of Medicine CEO; and David Saltzman, Atria Health and Research Institute co-founder.
The transformed organization plans to distribute overdose reversal medications and addiction treatment drugs at production cost or below.
“Through not-for-profit access to overdose reversal medicines and treatments for opioid use disorder, Knoa Pharma is committed to providing care and saving lives in communities most affected by the opioid crisis,” Rothman said in a statement.
The majority of settlement funds will be distributed to state and municipal governments that absorbed opioid addiction costs in their areas, while $865 million has been designated for individual claimants who developed opioid dependencies or lost family members.
