The Case for a Public Option for the Drug Industry

Under siege from thousands of lawsuits from federal, state, and local governments for its role in the deadly opioid addiction crisis, drug manufacturer Purdue Pharma reached a tentative settlement with some of the plaintiffs last week. In the deal, Purdue would transform itself through the bankruptcy process from a typical, profit-chasing drugmaker into a “public beneficiary company.” It’s an offer that has been rejected by many of the attorneys general suing the company. They believe the proposed settlement doesn’t come close to compensating for the harm done by the flood of addictive OxyContin the company pumped into communities to pad its bottom line. Purdue, for its part, is moving ahead, filing Sunday night for Chapter 11 bankruptcy. The two sides could square off in court as early as this week.  Nonetheless, the proposition raises an important question: If plaintiffs are open to the idea of turning Purdue into a public trust run by appointees of a federal bankruptcy judge—one that would distribute its profits to state and local governments—why not take one more step? Why not create the beginnings of a network of public pharmaceutical companies like those that already exists in such countries as Sweden, Brazil, and Thailand?