Purdue Pharma LP, manufacturer of OxyContin, filed for bankruptcy yesterday after reaching a potential settlement with several state and local governments who had sued the company for their role in the opioid epidemic.

The bankruptcy filing did not come as a surprise, and the settlement deal could be worth up to $12 billion over time. The lawsuits allege that the company and the Sackler family who owns the company misled doctors and patients about the addiction and overdose risks of their painkillers. They have denied these allegations.

“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation,” Steve Miller, chairman of Purdue’s board of directors, said in a statement, “and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis. We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible.”

The company faces lawsuits from 2,600 government and other entities and almost half of them have not signed on for the settlement proposal. Some of them plan to continue litigation in other courts against the Sackler family. The family has agreed to pay at least $3 billion in this settlement and give up control of the company, which will be reformed so that future profits go to the company’s creditors.

A court filing by the New York Attorney General’s office contended that family members used offshore and hidden accounts to transfer money, which could add to states’ claims that the family has been trying to shield their wealth because of the pending lawsuits.

According to the U.S. Centers for Disease Control and Prevention, in 2017 and 2018 opioids were involved in over 47,000 deaths. Though the drugs Purdue produces are only a portion of opioids available to be prescribed, the company is blamed because they developed the drug and aggressively marketed the drug as having a low risk of addiction even though they may have known otherwise.

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