Purdue Pharma has filed for bankruptcy in a settlement agreement that it hopes will provide more than $10 billion to address the opioid crisis, the company has said.
The pharmaceutical giant whose prescription painkiller OxyContin is blamed for much of the US opioid addiction epidemic, is facing thousands of state and federal lawsuits.
The settlement, which is subject to court approval, will contribute Purdue's entire value to a body established for the benefit of the claimants and the American people.
Purdue Chairman Steve Miller said the proposals will "provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis."
The company said that it had filed for reorganisation under Chapter 11 of the US Bankruptcy Code and that the board of a new company would be selected by claimants and approved by the Bankruptcy Court.
Steve Miller said the restructuring will avoid "wasting hundreds of millions of dollars and years on protracted litigation."
The cases against Purdue seek to address the costs of millions of Americans sinking into addiction after using potent opioid painkillers that doctors freely, and often criminally, prescribed over the past two decades.
Well over 400,000 people died of opioid overdoses in that period, while the pharmaceutical companies involved raked in billions of dollars in profits.
And while the flood of prescription opioids into the black market has now been curtailed, addicts are turning to heroin and highly potent fentanyl, where the risk of overdose and death is even higher.
In 2017, 47,000 people died in the US as a result of overdosing on opioids including prescription drugs, heroin and fentanyl, according to the Centers for Disease Control.
As part of the settlement, Purdue says it will potentially provide communities with millions of addiction treatment drugs, at no or low cost, to help tackle the crisis.
"Purdue has received FDA fast-track designation for nalmefene hydrochloride, a much-needed treatment that has the potential to reverse overdoses from powerful synthetic opioids such as fentanyl," the company said in its statement.
The development of a nasal naloxone product, that can be sold over-the-counter, is another addiction reversal medication that the newly restructured company could continue to support.
As well as giving up control of Purdue, the settlement will also see the wealthy Sackler family personally contribute $3 billion, with the potential for further monetary contributions.
Forbes estimates the wealth of the Sackler family at $13 billion, but their international reputation has taken a hit in recent months after demonstrations against their role in the opioid crisis.
New York's Guggenheim Museum, the Metropolitan Museum of Art and London's Tate Modern have said they would stop accepting donations from the family.
The Louvre Museum in Paris also recently removed the Sackler name from its Sackler Wing of Oriental Antiquities.