After earning perhaps the most villainous reputation in the industry’s history, Purdue Pharma is no more. In its place, Knoa Pharma has risen from the ashes and will continue to sell the former company’s drugs, including opioids like OxyContin. But it now has an expressed mission aimed at addressing the damage Purdue left behind: Knoa will be structured to prioritize public health over profit.
Knoa began operations on May 1 after a judge approved a criminal sentence tied to earlier charges against the company. That decision paved the way for Purdue to be dissolved and reach a multi-billion-dollar national settlement that resolves claims tied to its role in a massive opioid crisis that’s claimed some 900,000 lives since 1999. The new nonprofit company will play by different rules than a traditional pharma and train its focus on opioid addiction mitigation and prevention.
Knoa is now 100% owned by a nonprofit foundation, overseen by a board of trustees. The former owners, the Sackler family, will have no role in the new company, and a separate board will keep tabs on operations. Any money the company makes will be reinvested in public health initiatives.
But for many, the landmark settlement still fell short.
“The Sacklers knowingly misled the physician community and the public. It was not a mistake, or even just sloppy. It was a deliberate lie,” Michael Abrams, managing partner at consulting firm Numerof & Associates, said in an email. “This is as bad as bad behavior gets in the business of pharmaceutical manufacturing. Knoa Pharma is a heartwarming step in the right direction, but the settlement as a whole sets a terrible precedent for accountability in the industry.”
Making up for past harms
Purdue faced allegations that its company leaders engaged in what the bankruptcy judge called “a purposeful, intentional and sophisticated crime scheme” to push sales of its opioid medications, and didn’t do enough to prevent them from landing on the black market.
“Under the Sacklers’ control, Purdue developed, manufactured, and then misleadingly marketed its deadly opioids, destroying lives and communities across the country,” said New York Attorney General Letitia James in a written statement. “This company that put profits over people for decades is now shut down forever.”
While Knoa will still sell opioid drugs, it can’t promote them, and an independent monitor will oversee its activities to ensure it’s distributing opioids safely while actively working to prevent them from being diverted into illegal sales channels. It’s also barred from lobbying or using opioid sales metrics for compensation. Knoa will also provide resources to communities to combat addiction, including opioid reversal medications and treatments for substance use disorders.
The company might also continue investing in drug R&D. Currently, Knoa has two candidates in development: a phase 2 investigational drug for glioblastoma, and a first-in-class therapy targeting the nociceptin/orphanin-FQ receptor that’s phase 2 ready for several indications including insomnia and alcohol use disorder. All of the indications are “available for partnering,” according to the company.
The $7.4 billion settlement agreement was the result of nearly a decade of work by multiple state attorneys general. Massachusetts, one of 55 states and territories that signed on to the deal, was the first to file suit against the Sackler family, and will receive up to $105 million in opioid settlement funds, which, like settlements offered to other states, will go toward preventing and mitigating opioid related harms.
And while the Sackler family drama has become well known and the subject of multiple books and a TV series, more insights about the inner workings of Purdue could be on the way. As part of the settlement, Purdue will be required to release 30 million documents about its opioid business.
While some were glad to bring years of litigation to a close, critics wanted Purdue’s leaders and owners, not just the company, to face criminal accountability for their role in the devastation.
“As a result of their commercial efforts, the family took in about $10.7 billion via their company, Purdue,” Abrams said. “Now, after more than five years of court battles, they will pay about $7 billion as part of the settlement, most of which will go to government entities dedicated to fighting the opioid crisis started by Purdue. No one will go to jail.”
