Dangerous Drugs

OxyContin maker Purdue Pharma pleads guilty, agrees to $8 billion in penalties in opioid plea deal

November 2, 2020

The deal includes a guilty plea of three felony counts, the dissolution of the company, and over $8 billion in penalties.

OxyContin maker Purdue Pharma LP has agreed to plead guilty to charges that the company conspired to defraud the United States and violated the Food, Drug and Cosmetic Act, as well as anti-kickback laws. The settlement, which was announced by the U.S. Department of Justice in October, resolves investigations into how Purdue marketed its painkillers and the role it played in helping fuel the national opioid crisis. The deal includes a guilty plea of three felony counts, the dissolution of the company, and over $8 billion in penalties. The Sackler family, the owners of Purdue, have agreed to give up their stake in the company and pay a $225 million civil penalty, though no family members have been criminally charged.

Deputy Attorney General Jeffrey Rosen commented on the agreement, “This is a resolution which, if approved by the court, will redress past wrongs and will provide extraordinary new resources for the treatment and care of those affected by opioid addiction (1).” Numerous state attorneys general oppose the deal, however, and are demanding that the Sackler family contribute more. The states have claimed the Sackler family and Purdue have caused nearly $2.16 trillion in damage to the U.S. after decades of aggressively pushing opioids (2). According to the Centers for Disease Control and Prevention, nearly 450,000 people in the U.S. have died from prescription and illicit opioids in the last 20 years alone (3).

Purdue filed for Chapter 11 bankruptcy protection in September 2019, shortly after reaching a deal to resolve thousands of similar lawsuits brought by local governments, states, and tribes.  Purdue’s bankruptcy estate has recently been valued at around $5 billion, including $3 billion pledged by the Sacklers (4). The Sackler family said in a statement that they are giving up ownership in the company to avoid costly litigation.

The settlement still needs approval from the court and will be brought before U.S. Bankruptcy Judge Robert Drain in New York on November 17 to determine whether the deal is fair and equitable. Deputy Attorney General Rosen maintained that the settlement is silent as to any potential civil or criminal claims against the Sackler family, whose finances have come under scrutiny after allegedly withdrawing billions of dollars from Purdue in the last few years. Rosen added that “the release of claims against the Sacklers will likely be a critical part of any Chapter 11 plan and will draw opposition from claimants seeking to claw back those funds (5).”

References

1.      https://www.law360.com/articles/1321558/purdue-to-pay-8b-in-penalties-in-doj-opioid-plea-deal

2.      Ibid

3.      https://www.cdc.gov/drugoverdose/epidemic/index.html

4.      https://www.forbes.com/sites/siladityaray/2020/10/21/oxycontin-maker-purdue-pharma-reaches-8-billion-settlement-in-opioid-crisis-probe/?sh=2bfd2f7c1e20

5.      https://www.law360.com/articles/1321558/purdue-to-pay-8b-in-penalties-in-doj-opioid-plea-deal

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