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OxyContin-maker Purdue Pharma, which has become synonymous with an overdose crisis that’s killed tens of thousands of Americans, will plead guilty to three federal criminal charges and face more than $8 billion in penalties to resolve criminal and civil investigations against it, the Department of Justice announced Wednesday.
Just to end its criminal case, the company will face the largest fine ever levied against a pharmaceutical manufacturer, including a $3.5 billion penalty and $2 billion in criminal forfeiture, according to federal officials. Separately, the company will face $2.8 billion to resolve its civil liability under the False Claims Act, according to the DOJ.
The criminal charges include conspiracy to defraud the United States and two counts of conspiracy to violate federal anti-kickback laws, after the company paid speaker fees to two physicians to induce them to write more opioid prescriptions, according to the DOJ.
Purdue Pharma will also admit to impeding the Drug Enforcement Administration (DEA) by passing on misleading information and alleging it had maintained an anti-diversion program when it was marketing its drugs to “more than 100 healthcare providers whom the company had good reason to believe were diverting opioids,” the DOJ said.
The company will also admit that it “knowingly and intentionally conspired and agreed with others to aid and abet” the use of its drugs “without a legitimate medical purpose and outside the usual course of professional practice,” according to the Associated Press.
“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 Pharma’s board of directors, said in a statement Wednesday.
The resolutions announced Wednesday will not release the Sackler family, which owns Purdue, from criminal liability, nor Purdue executives from civil liability, according to the DOJ. The Sacklers did, however, agree to $225 million in damages to resolve civil liability under the False Claims Act, the DOJ said Wednesday.
In a statement following the announcement of a resolution deal, members of the Sackler family who served on Purdue Pharma’s board said they acted “ethically and lawfully” and “adopted rigorous policies requiring Purdue to be in full compliance with the law.”
The resolution deal is subject to approval by a New York bankruptcy court, according to the DOJ. The settlement money from the agreement would largely go to “state, local, and tribal governments to address the opioid crisis,” Purdue Pharma said. Federal officials also suggested the deal would provide “extraordinary new resources,” according to NPR.
“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” Tim McDermott, the assistant administrator at the DEA, said in a press release Wednesday. “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted.”
Purdue Pharma has long been blamed for stoking the opioid crisis, thanks to the company’s incredibly addictive crown jewel drug: OxyContin. The painkiller, introduced in 1996, was aggressively marketed to Americans and quickly became a blockbuster drug while Purdue Pharma executives downplayed its potential for abuse. More than two decades, thousands of lawsuits, and hundreds of thousands of drug overdoses later, Purdue Pharma filed for bankruptcy. But the company’s staunchest critics have said executives haven’t been punished nearly enough for their role in an epidemic in which nearly 450,000 died of overdoses from illicit and prescription opioids from 1999 to 2018.
As part of the agreement with federal officials announced Wednesday, Purdue Pharma will exist as a “public benefit company,” once it exits bankruptcy. That means it’ll be “owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest,” the DOJ said in a news release. The Sacklers will not be involved.
Last week, a group of 25 state attorneys general warned that was exactly the sort of scenario the government should avoid.
“Thousands of Americans have died, and it is a top priority of every state to enforce the law against the perpetrators whose misconduct caused the opioid crisis,” the attorneys general wrote in a letter to Attorney General William Barr. The last business our states should protect with special public status is this opioid company.”
Democratic legislators separately wrote a letter to Barr last week expressing “deep concern” about the potential resolution with Purdue Pharma. They wrote the Sacklers belonged in prison for what they’d done and that financial penalties were too little a punishment for a company owned by billionaires.
“Millions of American families impacted by the opioid epidemic are looking to you and your Department for Justice,” the legislators wrote. “Justice for the sleepless nights spent worrying about sons and daughters trapped in the grip of substance use disorder, justice for the jobs lost and the lives ruined, and justice for the lives of loved ones lost to overdoses.”
“If the only practical consequence of your department’s investigation is that a handful of billionaires are made slightly less rich, we fear that the American people will lose faith in the ability of the department to provide accountability and equal justice under the law,” they added.
CORRECTION Oct. 21, 2020 8:28 p.m.: This article has been corrected to reflect the fact that the nearly 450,000 opioid overdoses that occurred from 1999 to 2018 resulted from both illicit and prescription opioids more generally, not just OxyContin.