- Purdue Pharma and the U.S. Department of Justice have reached a global settlement for criminal and civil investigations related to company's mis-marketing of OxyContin and other opioid painkillers. The settlement is valued at more than $8 billion, and will lead to the dissolution of Purdue once a bankruptcy court approves the resolution.
- According to the Justice Department, Purdue has agreed to plead guilty to three felony counts, including one for conspiracy to defraud the U.S. and violate the Food, Drug, and Cosmetic Act, and two for conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution carries a $3.54 billion fine and a $2 billion forfeiture, the largest penalties ever levied against a pharmaceutical manufacturer.
- On the civil end, Purdue has agreed to pay $2.8 billion to resolve its liability under the False Claims Act. Separately, the family that founded Purdue, the Sackler family, has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.
The Centers for Disease Control and Prevention estimates that in 2018, two out of every three drug overdose deaths — representing roughly 47,000 lives — involved an opioid. And among those cases, about a third involved a prescription opioid.
Federal and state lawmakers and attorneys generals argue the epidemic was fueled by the marketing tactics used by manufacturers such as Purdue. Wednesday's announcement, and, in particular, the criminal guilty pleas, provide the greatest validation yet to their claims.
"Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients," added Steven D’Antuono, Assistant Director in Charge of the Federal Bureau of Investigation's Washington Field Office. "The FBI remains committed to holding companies accountable for their illegal and inexcusable activity and to seeking justice, on behalf of the victims, for those who contributed to the opioid crisis."
Purdue's criminal guilty pleas have the company admitting that, from May 2007 to at least March 2017, it conspired to defraud the U.S. and, more specifically, the Drug Enforcement Agency by representing that the anti-diversion program for its opioid products was effective. But in actuality, according to the Justice Department, Purdue kept marketing those products to more than 100 healthcare providers who there was "good reason to believe" were diverting opioids.
The department also said Purdue admits to reporting misleading information, such as prescriptions written by doctors suspected of diversion, to the DEA to boost manufacturing quotas.
What's more, Purdue will admit to having paid two doctors to entice them to write more prescriptions of its opioid products, and to paying an electronic health records company to refer, recommend and arrange for the ordering of its extended release opioids: OxyContin, Butrans and Hysingla.
Once the criminal settlement is approved by the bankruptcy court in the Southern District of New York, Purdue will begin the process of transforming into a public benefit company that, as the name suggests, would operate for the benefit of the U.S. public. Specifically, its aim would be to safely deliver "legitimate prescription drugs" while also donating or providing very discounted overdose rescue drugs and treatment medications. Any proceeds would go to state and local opioid abatement programs.
Terms of the forfeiture have Purdue handing over $225 million on the effective date of the bankruptcy. After that, the Justice Department can credit up to $1.775 billion against the agreed $2 billion amount.
The civil settlement, meanwhile, gives the federal government bankruptcy claim for recovery of $2.8 billion and, in exchange, resolves allegations that Purdue caused false claims to be submitted to federal healthcare programs from 2010 to 2018.
While the settlements don't include prison sentences for Purdue executives or members of the Sackler family, the Justice Department noted that states can still go after those parties for unresolved claims.
"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 Jeffrey Rosen, the U.S. Deputy Attorney General, in a statement.
Some, however, argue the settlements don't go far enough.
"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 Attorney General Maura Healey wrote on Twitter.
In its own statement cited by media outlets, the Sackler family denied criminal wrongdoing.
Earlier this month, Mallinckrodt, a generic drugmaker that shipped billions of opioid pills across America, joined Purdue in filing for bankrupcty. Another opioid maker, Insys Therapeutics, has also sought bankruptcy protection.