BioPharma, Legal

Purdue to plead guilty, pay $8.3B deal to resolve opioid charges

In addition to monetary damages and the guilty pleas, the government is seeking to transform the maker of OxyContin into a public benefit company that would fund efforts to curb opioid abuse and give away drugs to prevent overdose deaths.



Purdue Pharma has agreed to plead guilty to three criminal charges and pay $8.3 billion in a settlement that would end criminal and civil investigations launched by the U.S. Department of Justice into the company’s marketing of opioid prescription drugs.

The settlement announced Wednesday – the largest ever against a pharmaceutical manufacturer – also would transform Stamford, Connecticut-based Purdue, which filed for bankruptcy protection last year. The deal calls for converting Purdue into a public benefit company controlled by a trust and required to act in the public interest.

Per the DOJ statement, Purdue Pharma has agreed to plead guilty in federal court in New Jersey to 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.”

Federal prosecutors hailed the deal as a milestone in their ongoing efforts to hold drug makers accountable for the damage caused by prescription opioids like Purdue’s OxyContin.

“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 re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis,” said Deputy Attorney General Jeffrey A. Rosen said in the statement.

The deal does not call for prison time for any executives or members of the Sackler family, who own Purdue. However, it does not preclude criminal charges in the future.

It also does not resolve state claims against Purdue or the Sackler family. Indeed, the two parties face a slew of state, local and Native American tribal lawsuits, including one led by New York Attorney General Letitia James, who said in a statement that she would continue to fight in court.

“We are committed to holding the Sacklers and others responsible for the role they played in fueling the opioid crisis,” James said.

According to the National Institute on Drug Abuse, 2018 data shows that every day, 128 people in the United States die after overdosing on opioids. 

The avalanche of litigation is what prompted Purdue to file for bankruptcy protection. As a result, the deal with the federal government requires court approval. A hearing is scheduled for Nov. 17 before U.S. Bankruptcy Court for the Southern District of New York.

Under the federal settlement, the monetary damages are split into a criminal fine of $3.544 billion, a criminal forfeiture of $2 billion and a civil penalty of $2.8 billion. The Sacklers have agreed to pay $225 million to settle its civil liability under the False Claims Act.

A big chunk of the criminal forfeiture – $1.775 billion – is tied to Purdue’s conversion to a public-benefit company or PBC. The figure represents the value that would flow to state and local governments as a result of the reformed company’s funding of opioid abatement programs and donations of anti-overdose drugs, among other initiatives. Purdue would pay the remaining $225 million directly.

As part of its guilty pleas, Purdue admits to a number of charges. They include misleading federal regulators about its efforts to prevent opioids from falling into the wrong hands and promoting opioids to doctors that the company knew were prescribing the drugs for uses that were “unsafe, ineffective, name medically unnecessary, and that often led to abuse and diversion.”

“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” Steve Miller, who joined Purdue’s board as chairman in July 2018, said in a statement. He added: “Purdue today is a very different company. We have made significant changes to our leadership, operations, governance, and oversight.”

The changes include a new president and CEO and the resignation of Sackler family members from the company’s board. Purdue also ended all promotions of opioids and opioid products.

Photo: Moussa81, Getty Images

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