DOJ, Purdue come to $8B agreement that includes dissolving company
The Department of Justice and Purdue Pharma have come to a resolution of the DOJ's criminal and civil investigations into the opioid manufacturer, as well as a civil resolution of its civil investigation into individual shareholders from the Sackler family.
As part of the agreement, Purdue will plead guilty to three federal charges and pay a total of more than $8 billion in various fines and forfeitures, including $3.54 billion in criminal fines, $2 billion criminal forfeiture and $2.8 billion in civil liability fines. In order to pay the settlement, Purdue will be dissolving and transferring its assets to a public benefit company that will continue to produce such painkillers as OxyContin alongside opioid addiction treatment and overdose-reversal treatments, overseen by trustees with the aim of functioning entirely in the public interest. The DOJ noted that the resolutions are subject to a bankruptcy court's approval of Purdue's reorganization plan.
“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,” said Deputy Attorney General Jeffrey Rosen. “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.”
Purdue board chairman Steve Miller, who joined the company in 2018, said, “Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts."
Miller said that its reorganization plan would deliver more than $10 billion in value to claimants and communities. “Purdue today is a very different company. We have made significant changes to our leadership, operations, governance, and oversight.”
Separate from the company, the Sackler family has agreed to pay $225 million to resolve its civil False Claims Act liability.
“The opioid epidemic remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary Cantrell, deputy inspector general for Investigations at the U.S. Department of Health and Human Services’ Office of Inspector General. “Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being. With our law enforcement partners, we will continue to combat the opioid crisis, including holding the pharmaceutical industry and its executives accountable.”
The DOJ noted that these resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.
Additionally, the DOJ noted that the public benefit company that will emerge after Purdue's reorganization will work to deliver prescription drugs safely while also offering steep discounts for overdose rescue drugs and medically assisted treatment medications for communities. The proceeds from the trust will be directed toward state and local opioid abatement programs.
As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas. The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion. The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.
In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion, an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended-release opioid products – OxyContin, Butrans, and Hysingla.