As Purdue Pharma Agrees to Settle with the DOJ, Revisit Its Role in the Opioid Crisis | Opioids, Inc. | FRONTLINE | PBS
In the latest chapter of a complex legal battle over who is responsible for the nation’s opioid crisis, Purdue Pharma, the manufacturer of the notorious painkiller OxyContin, has arrived at an $8.3 billion settlement with the federal government, pending court approval.
Announced in an Oct. 21 Department of Justice press conference, the settlement, if approved, resolves the federal government’s civil and criminal probes into Purdue Pharma, which is currently in bankruptcy; an additional settlement resolves a federal civil case against Purdue Pharma’s owners, the Sackler family.
“It’s also important to note that this resolution does not prohibit future criminal or civil penalties against Purdue Pharma’s executives or employees,” Jeffrey A. Rosen, the U.S. deputy attorney general, said at the press conference.
Under the settlement, Purdue Pharma admits guilt on three felony charges involving conspiring to defraud the U.S. and break anti-kickback regulations in how it marketed opioids. The settlement involves a $3.5 billion criminal fine and a $2 billion criminal forfeiture, as well as a civil payment of $2.8 billion, though actual monetary payments could be substantially less, once the company’s value is factored in. Separately, the Sacklers themselves will make a $225 million payment to the U.S.
The settlement “will require that the company be dissolved and no longer exist in its present form,” Rosen said, with the Sacklers barred from any controlling or owning role moving forward. Instead, if the settlement is approved by bankruptcy court, the company’s assets would become “owned by a trust for the benefit of the American public,” Rosen said. The new company would still be able to manufacture opioid drugs but would also be required to produce large quantities of medicines to treat and respond to addiction and overdoses, and would need to offer the latter as donations or “at cost.”
“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, said in a statement.
In a separate statement, Sackler family members who served on the Purdue Pharma board said they had “acted ethically and lawfully” and that they “reached today’s agreement in order to facilitate a global resolution that directs substantial funding to communities in need, rather than to years of legal proceedings.”
The statement also said, “Regarding the plea agreement between the government and Purdue, no member of the Sackler family was involved in that conduct or served in a management role at Purdue during that time period.”
A number of states’ attorneys general spoke out against the terms of the proposed settlement as inadequate and vowed to continue to pursue cases against the company and the Sacklers, which the federal settlements do not resolve.
Purdue Pharma has long been accused of being a driver of America’s opioid crisis. FRONTLINE’s 2016 documentary Chasing Heroin investigated how that crisis came to be, examining allegations about Purdue Pharma’s role in the early years of what has been called the worst drug epidemic in U.S. history.
Preliminary CDC data show that drug overdose deaths, after a brief dip in 2018, hit a record high in 2019, with nearly 72,000 fatalities. The toll continues to climb this year amid the coronavirus pandemic. Opioids, which account for most drug deaths, were involved in two out of every three drug overdose fatalities in 2018, according to the CDC.
Controversy over the agreement: The resolution with the Trump administration also includes a mandate to dissolve Purdue, with the Sacklers relinquishing all ownership and control. The company’s assets, pending the approval of a bankruptcy court, will be redirected to a government-owned “public benefit company” that will still produce OxyContin and opioid addiction treatment.
Last week, 25 state attorneys general wrote a letter urging the Justice Department against making such a move, saying the government shouldn’t benefit from sales of OxyContin, the 25-year-old drug that helped power the addiction crisis. Deputy Attorney General Jeffrey Rosen defended the plan against those criticisms.
“It was also our judgment on this that while prescription opioids can be abused, diverted, misused in very harmful ways, it’s a prescription pharmaceutical that does have some positive uses, and maintaining supply of those is itself something that could be beneficial,” Rosen told reporters Wednesday.
Rosen declined to say why DOJ didn’t pursue criminal charges against the Sacklers, noting only that the civil resolution doesn’t absolve them from other legal claims.
Purdue will plead guilty to conspiracy to defraud the government and kickback schemes involving payments to prescribing doctors and an electronic health records company.
Purdue Pharma, the manufacturer of the prescription painkiller OxyContin, reached an $8 billion settlement with the Department of Justice and will plead guilty to three federal criminal charges in connection with its role in America’s opioid crisis.
The Justice Department announced on Wednesday that it had reached a resolution in its investigation into individual shareholders from the Sackler family, who own the pharmaceutical company.
Purdue Pharma will plead guilty in a New Jersey federal court to three felony counts, including 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 deal does not release the company’s executives or owners from criminal liability and a criminal investigation is ongoing.
“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,” Deputy Attorney General Jeffrey Rosen said in the announcement. “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.”
According to the Justice Department, the resolution includes the largest penalties ever levied against a pharmaceutical company and includes a criminal fine of $3.544 billion, an additional $2 billion in criminal forfeiture and a $2.8 billion civil settlement.
Separately, the Sackler family has agreed to pay $225 million in damages.
A Rebirth Behind Bars
Steve Miller, who became chairman of the company’s board in 2018, said in a press release that the company “deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice.”
The company filed for bankruptcy last year as it wades through thousands of civil lawsuits. As part of the resolution, Purdue Pharma would cease to operate in its current form and would instead transition to a public benefit company owned by a trust or similar entity. The new company would be operated under different ownership and “will work to provide for free or at cost millions of doses of lifesaving opioid addiction treatment and overdose reversal medicines,” the press release stated.