US drugmaker Purdue Pharma pleaded guilty to three criminal charges over its intense drive to push sales of the prescription opioid OxyContin, which stoked a nationwide addiction crisis, the Justice Department announced Wednesday.
Purdue also agreed to $8.3 billion in fines, damages and forfeitures to settle the criminal case against it, the department said.
In a separate agreement, the billionaire Sackler family, which built Purdue to a pharmaceutical giant on the back of lucrative sales of OxyContin, agreed to pay $225 million to resolve civil liability charges filed by the Justice Department.
“Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients,” said FBI assistant director Steven D’Antuono.
Purdue, which filed for bankruptcy protection last year, pleaded guilty to one count of fraud and two counts of violating kickback laws over its marketing and sales of OxyContin and two other hydrocodone-based treatments, which involved encouraging distributors and doctors to aggressively push the highly addictive drugs to consumers.
Even after paying $600 million for falsely marketing the painkiller as “less addictive,” the Justice Department said, Purdue ratched up its sales drive and developed new addictive applications which it marketed through a network of 100,000 prescribing doctors and nurse practitioners.
Among them were thousands of hyper-prescribers that Purdue “knew or should have known were prescribing opioids for uses many of which were not for a medically accepted indication, were unsafe, ineffective, and medically unnecessary,” or which were resold on the black market, the charges said.
To encourage them Purdue had a program dubbed “Evolve to Excellence” which offered financial and other incentives, particularly offering doctors lucrative speaking gigs, which amounted to kickbacks for pumping out more prescriptions of the company’s drugs.
Its activities, combined with those of other prescription opioid producers and distributors, fed an epidemic of addiction. Millions of Americans became dependent on the painkillers while the drugmakers reaped billions of dollars in profits.
According to the Centers for Disease Control and Prevention, more than 500,000 Americans have died of opioid overdoses — both prescription and non-prescription — since 1999.
In a statement, Steven Miller, Purdue’s chairman since 2018, said the company “deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice.”
“Purdue today is a very different company. We have made significant changes to our leadership, operations, governance, and oversight,” he added.
Purdue also faces billions of dollars in claims from state and local authorities around the country, and in September 2019 filed for bankruptcy to fend off more legal claims against it.
Because of the bankruptcy and competing claims from litigants and creditors, the Justice Department admitted it might not
Purdue Pharma, the company that makes OxyContin, the powerful prescription painkiller that experts say helped touch off an opioid epidemic, will plead guilty to three federal criminal charges as part of a settlement of more than $8 billion, Justice Department officials told The Associated Press.
The company will plead guilty to three counts, including conspiracy to defraud the United States and violating federal anti-kickback laws, the officials said. The resolution will be detailed in a bankruptcy court filing in federal court.
The deal does not release any of the company’s executives or owners — members of the wealthy Sackler family — from criminal liability. A criminal investigation is ongoing.
The officials were not authorized to discuss the investigation publicly and spoke on condition of anonymity.
The settlement is the highest-profile display yet of the federal government seeking to hold a major drugmaker responsible for an opioid addiction and overdose crisis linked to more than 470,000 deaths in the country since 2000.
The settlement comes less than two weeks before a presidential election where the opioid epidemic has taken a political back seat to the coronavirus pandemic and other issues. But the deal does give President Donald Trump’s administration an example of action on the addiction crisis, which he promised early in his term.
As part of the resolution, Purdue will admit that it impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company’s manufacturing quotas, the officials said.
A Justice Department official said Purdue had been representing to the DEA that it had “robust controls” to avoid opioid diversion but instead had been “disregarding red flags their own systems were sending up.”
Purdue will also admit to violating federal anti-kickback laws by paying doctors, through a speaking program, to induce them to write more prescriptions for the company’s opioids and for using electronic health records software to influence the prescription of pain medication, according to the officials.
Purdue will make a direct payment to the government of $225 million, which is part of a larger $2 billion criminal forfeiture. In addition to that forfeiture, Purdue also faces a $3.54 billion criminal fine, though that money probably will not be fully collected because it will be taken through a bankruptcy, which includes a large number of other creditors. Purdue will also agree to $2.8 billion in damages to resolve its civil liability.
Purdue would transform into a public benefit company, meaning it would be governed by a trust that has to balance the trust’s interests against those of the American public and public health, the officials said. The Sacklers would not be involved in the new company and part of the money from