OxyContin maker Purdue Pharma is pleading guilty to federal criminal charges for its role in helping to set off the national opioid epidemic.
Settlement Exceeds $8 Billion
The guilty plea, which was announced by the United States Department of Justice on October 21, 2020, is part of a settlement agreement that exceeds $8 billion. The deal does not release any of Purdue Pharma’s executives or its owners, the Sackler family, from criminal liability, and a criminal investigation remains ongoing.
Under the terms of the agreement, Purdue Pharma will plead guilty to three counts, including conspiracy to defraud the United States and violating federal anti-kickback laws. The Sacklers will also lose all control over the company. The former OxyContin maker will become a public benefit company, meaning that it will be governed by a trust that needs to balance the trust’s interests against the interests of the American public and public health.
OxyContin Maker Admits to Impeding DEA Investigation
As part of the plea deal, Purdue is admitting that it impeded a Drug Enforcement Administration (DEA) investigation by claiming falsely that it had an effective program to avoid drug diversion and by reporting misleading information to the DEA to boost its manufacturing quotas.
Purdue also admits to violating federal anti-kickback laws by using a speaking program as a means to pay doctors to induce them to write more prescriptions for its opioid products. The company also acknowledges that it used electronic health records software to influence the prescription of pain medications. In so doing, the OxyContin maker “knowingly and intentionally conspired and agreed with others to aid and abet” the dispensing of medication from doctors “without a legitimate medical purpose and outside the usual course of professional practice.”
The deal requires Purdue to make a direct payment of $225 million to the federal government as part of a larger $2 billion criminal forfeiture. The company also faces a $3.54 billion criminal fine, though it will probably not be fully collected because it will be taken as part of a bankruptcy, which already includes a large number of other creditors, including thousands of local and state governments.
Additionally, the former OxyContin maker has agreed to $2.8 billion in damages to resolve its civil liability. Part of the settlement would fund drug programs and medication-assisted treatment to help combat the opioid epidemic.
“Mere Mirage” of Justice
Despite the magnitude of the deal and the possibility of further criminal charges, some state attorneys general still insist that the agreement fails to hold the Sacklers accountable, criticizing the settlement as a “mere mirage” of justice for Purdue’s victims.
“The federal government had the power here to put the Sacklers in jail, and they didn’t,” said Connecticut Attorney General William Tong. “Instead, they took fines and penalties that Purdue likely will never fully pay.”
Members of the Sackler family have insisted that they acted “ethically and lawfully” and that Purdue documents that must be made public under the settlement will demonstrate that fact.
The Food and Drug Administration has declared opioid addiction a “public health crisis.” More than 130 people nationwide die from opioid overdoses on a daily basis, accounting for nearly three-quarters of all fatal drug overdoses. The opioid epidemic is so pervasive that poisoning has overtaken car crashes as the leading cause of accidental deaths across the country.
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