Mallinckrodt announced a $1.6 billion settlement with 47 U.S. states and territories for its role in the nation’s opioid crisis, in a deal that involves the bankruptcy of its generics unit.
Under the agreement, the $1.6 billion will be paid out over eight years, including $300 million when Mallinckrodt’s specialty generics business emerges from bankruptcy. Mallinckrodt will then pay $200 million for the first two anniversaries of the completion of the bankruptcy and $150 million on the third through eight anniversaries.
A “substantial majority” of the payments will go toward a trust that will establish an abatement fund that will cover the costs of opioid-addiction treatment and related efforts, the company said. Mallinckrodt said that the business will be filing for bankruptcy “in the coming months.”