What's going on?

Purdue Pharma was left hurting after it filed for Chapter 11 � better known as bankruptcy protection � in order to deal with the wave of over 2,000 lawsuits related to its famed painkiller, OxyContin. Ouch.

What does this mean?

Purdue is one of several big US pharma firms accused of playing a leading role in America�s opioid crisis � and it got a taste of its own medicine last week, as it agreed to settle the mountain of cases piled against it.


But it�ll take more than a spoonful of sugar to help the potential $10 billion payout go down. The pharma giant only has about that much in assets, and its legal costs this year are expected to total a migraine-inducing $270 million (it�s a good year to be a lawyer ?). Purdue wasn�t left with much choice, then, but to hand the reins over to a trust and file for bankruptcy protection.

Why should I care?

For markets: Going for broke.

By filing for Chapter 11, Purdue hopes to nip its 2,000 lawsuits in the bud. The company is private, but it still has investors who have promised to pay $3 billion towards the settlement � which will partly come from the sale of Purdue�s UK-based drug company. And you may not have seen the last of OxyContin, either. Once payouts are, erm, paid out, Purdue (as a public trust organization) will decide whether to cease Oxy�s production altogether or continue selling it � and potentially use the proceeds to help opioid-affected communities.

For you personally: Payback time.

Employment data tracks both a country�s unemployment rate and the proportion of citizens available for work � i.e. participating. The US currently has a low participation rate, and the opioid epidemic may be partly responsible. Solving the crisis and adding more people to the workforce could, therefore, boost economic growth. But in the meantime, fewer workers around has led to more competition � and higher-than-expected wage growth.