The makers of Oxycontin, Purdue Pharma, are now expected to file for bankruptcy after settlement talks regarding the nation's opioid crisis have "hit an impasse", according to ABC News.

This impasse puts Purdue's federal trial over the opioid epidemic on track to start next month and sets the stage for significant legal drama involving state and local governments.

Purdue had been working for months to try and avoid trial by determining the company's responsibility for the crisis, which has cost over 400,000 Americans their lives. But an email from the attorneys general of Tennessee and North Carolina revealed that Purdue and the Sackler family had rejected two offers from the states over how payments would be handled as a result of a settlement.

Tennessee Attorney General Herbert Slatery and North Carolina Attorney General Josh Stein wrote in their message:

"As a result, the negotiations are at an impasse, and we expect Purdue to file for bankruptcy protection imminently."

The failure to settle could set up "one of the most tangled bankruptcy cases in the nation's history." It would leave almost every state and 2,000 local governments that have sued the drugmaker to fend for themselves in bankruptcy court for the company's remaining assets. Purdue had already threatened to file bankruptcy earlier this year, but was holding off while negotiations continued.

The Sackler family is being sued separately in at least 17 states, and its unclear what the bankruptcy means for them. Meanwhile, the family is believed to have transferred most of its multi-billion dollar fortune overseas.

Pennsylvania Attorney General Josh Shapiro says he will now sue the Sackler family, as other states have:

"I think they are a group of sanctimonious billionaires who lied and cheated so they could make a handsome profit," he said. "I truly believe that they have blood on their hands."

Purdue and the Sackler family had already settled for $270 million with the state of Oklahoma to avoid trial. Under one proposed settlement, the company would have entered into a structured bankruptcy that was said to have been worth $10 billion to $12 billion over time. This would have included $3 billion from the Sackler family, which would have given up its control of Purdue and contributed $1.5 billion more by selling Mundipharma, another company they own.

Shapiro has said that what the company was offering was not worth $10 billion to $12 billion. In their latest offers, the states looked to assure that the $4.5 billion from the Sackler family would be paid, but the family "refused to budge".

Tennessee's Slatery and North Carolina's Stein said that states are already preparing to handle bankruptcy proceedings. They wrote:

"Like you, we plan to continue our work to ensure that the Sacklers, Purdue and other drug companies pay for drug addiction treatment and other remedies to help clean up the mess we allege they created."

The nearly 2,000 cases filed have been consolidated under a single federal judge in Cleveland. Most of these lawsuits also name other opioid makers, distributors and pharmacies, some of whom are working on their own settlements.

Facing hundreds of other lawsuits in state courts, Purdue has sought a wide-ranging deal to settle all cases against it.

This impasse comes about six weeks before the scheduled start of the first federal trial under the Cleveland litigation. Filing for bankruptcy would "most certainly" remove Purdue from the trial and the bankruptcy judge would have wide discretion on how to proceed.