Purdue Pharma, manufacturer of OxyContin, the drug many say began the opioid crisis in the United States, agreed to plead guilty Wednesday to federal criminal charges in a settlement with the U.S. Department of Justice and also agreed to pay $8.3 billion in fines.
The charges against the company stem from its marketing of the highly addictive drug and its role in the nationwide crisis that has killed more than 450,000 Americans since 1990. Purdue has agreed to plead guilty a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen in a statement “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement reaffirms that the Department of Justice will not relent in its multipronged efforts to combat the opioids crisis.”
The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and the department is willing to credit the value conferred by the company to state and local governments under the department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act.
Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.
The deal does not release the company or its owners from further criminal charges, and the DOJ investigation continues. It also does not protect the company or its owners from other civil litigation. Thousands of lawsuits have been filed against Purdue and the Sackler family.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” Steve Miller, chairman of Purdue’s board of directors since 2018, said in a statement.
The timing of the deal suggests that the company wanted to settle under the Trump administration, believing it could get a better deal than with a Biden DOJ. Numerous state attorneys general have raised questions as to how effective the deal is as punishment for the Sackler family. Their $225 million settlement is pocket change for a family whose estimated wealth is at least $13 billion, much of it coming from sales of OxyContin diverted to family-controlled trusts and holding companies even as the company was under investigation.
“Purdue is doing everything they can to get this deal done in this administration,” Joe Rice, a negotiator for local governments that are suing Purdue, told The New York Times. “It’s advantageous to both sides.”
The company filed bankruptcy last year and will likely emerge as a new corporation once the dust settles. In the meantime, it’s unlikely that it will pay the entire amount of the settlement as creditors typically pay pennies on the dollar during bankruptcies. As of now, the DOJ is in line with other creditors.
“DOJ failed,” Massachusetts Attorney General Maura Healey wrote on Twitter in a response to the news of the settlement. “Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long.”
Massachusetts has scheduled depositions next month against some Sackler family members. The family continues to claim it acted “ethically and lawfully” and that “all financial distributions were proper.”
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