(Bloomberg) -- Purdue Pharma LP told a bankruptcy court it owes almost $100 million to pharmacy-benefit managers, drug distributors and state health departments in fees and rebates.
Purdue's biggest listed creditor is CVS Health Corp.'s pharmacy-benefits unit, CVS Caremark, at $19.2 million, and another CVS unit is listed as being owed $5 million. UnitedHealth Group Inc.'s PBM unit, OptumRx, is listed as owed $15.8 million, according to the bankruptcy filing.
The debts are “payer rebates,” according to the filing. Pharmaceutical companies typically pay such rebates to get more favorable treatment than competitors on drug-plan medications lists. The rebates are a near-ubiquitous practice in the industry, and steep discounting can help maintain sales of a product even when competitors may have a lower list price.
Purdue filed for bankruptcy late Sunday night in a deal to put the company into a trusteeship and provide $10 billion to states, cities and counties that have sued it and other drugmakers for their role in the U.S. opioid epidemic. The amounts owed to the creditors are dwarfed by the size of the settlement, in part because Purdue operated with few large or long-term obligations.
In the filing, the company says it has debts of $500 million to $1 billion.
Debts to States
Several state health departments are listed as creditors, including California's Department of Health Care Services and the North Carolina Department of Health and Human Services. Like for-profit PBMs, states can also negotiate rebates on products for their own programs. North Carolina and California are both among the states suing Purdue.
Purdue also owes the drug distributors who have been sued alongside it. The state and local governments suing the three major distributors claim they looked the other way as opioid prescriptions rose, a characterization the companies have objected to. AmerisourceBergen Corp. is owed $4.5 million by Purdue, McKesson Corp. $3.7 million, and Cardinal Health Inc. $3.5 million.
The amounts are listed as “distributor fees,” which are typically a percentage of a drug's price that's paid to the distribution companies.
Other debts include smaller amounts to corporate vendors for everything from advertising and branding to printing.
To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net
To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Steve Stroth
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