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OxyContin Maker fined $8 billion

New York – The maker of the highly addictive drug OxyContin has agreed to plead guilty to three federal criminal charges for its substantial role in creating the nation’s ongoing opioid crisis.  Purdue Pharma will pay more than $8 billion and then close its regular business as part of its criminal plea deal.

The fine monies will go toward opioid treatment and abatement programs. Purdue has agreed to pay a $3.5 billion fine and also forfeit $2 billion in past profits. The company also agreed to pay $2.8 billion for civil liability.

Related: Zantac Makers Being Investigated by DOJ

Drug Enforcement Administration Assistant Administrator Tim McDermott said in a statement: “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion.  The devastating ripple effect of Purdue’s actions left lives lost and others addicted.”

Because Purdue Pharma does not have the $8 billion in cash it needs to pay the huge fines, the company will be dissolved.  Any remaining assets will be used to create a new “public benefit company” controlled by a trust or some similar entity assembled to benefit U.S. citizens. The U.S. DOJ said the revamped company will work solely in the public interest. Its future earnings will pay the fines and penalties that will, in turn, be used to fight the ongoing opioid crisis.

That new Purdue company will continue to make painkillers like OxyContin, as well as other drugs to combat opioid overdose. Deputy Attorney General Jeffrey Rosen defended the plans for the new company to continue selling OxyContin; there are legitimate uses for painkillers such as OxyContin, said Mr. Rosen. 

The New Pain-Killer Company

The new pain-killer company will make life-saving overdose rescue drugs and medically assisted treatment medications. It will sell those drugs at deeply-discounted prices to communities dealing with the opioid crisis.

Sackler Family Makes Deal with DOJ

The U.S. Justice Department also reached a separate $225 million civil settlement with the former owners of Purdue Pharma, the Sackler family. However, the Sackler family could still face federal criminal charges, as could their current and former employees.

Purdue Pharma Statement

“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice,” said Purdue Chairman Steve Miller. “Purdue today is a very different company. We have made significant changes to our leadership, operations, governance, and oversight.”

Contributing to the opioid crisis

Purdue Pharma, which filed for bankruptcy in 2019, also plead guilty to violating federal anti-kickback laws, because it rewarded doctors for writing more opioid prescriptions.

450,000 Americans Dead from Opioids

Abuse of prescription painkillers is a major cause of the nation’s opioid crisis. The CDC says 450,000 people died in the United States from opioid overdoses in a 10-year period beginning in 1999. That number includes both prescription and illicit opioids. And about a third of those deaths in 2018 involved prescription opioids.

The cost of the opioid crisis to federal, state, and local governments dwarfs the $8 billion Purdue fine.  States across the U.S. have filed claims totaling more than $2 trillion in the Purdue Pharma bankruptcy case.

States Object

Because the cost of the opioid crisis has been so astronomical, some states object to the settlement. The state attorneys general of 25 states wrote to US Attorney General William Barr last week. They argued against the plan to create a government-controlled company out of the asset ashes of Purdue Pharma. The attorneys argued that the U.S. government does not belong in the OxyContin sales business.

The letter said at least one potential buyer had shown interest in buying Purdue Pharma’s failing drug business.

The letter from the 25 attorneys said: “The public should be confident that public officials are seeking to avoid having special ties to an opioid company, conflicts of interest, or mixed motives in an industry that caused a national crisis. Selling the business to a private owner may also deliver more upfront money that cities and states can use to abate the opioid epidemic.”

Several attorneys who signed that earlier letter were quick to criticize the deal this week. 

Many Sates say Opioid Crisis cost U.S. Economy $2 trillion+

“This settlement provides a mere mirage of justice for the victims of Purdue’s callous misconduct,” said Connecticut Attorney General William Tong. “The federal government had the power here to put the Sacklers in jail, and they didn’t. Instead, they took fines and penalties that Purdue likely will never fully pay.”

The states will likely continue to seek money from Purdue as part of its bankruptcy process. The settlement also needs the approval of the bankruptcy court.

“Every dollar paid here is one dollar less for states like Connecticut trying to maximize money from Purdue and the Sacklers to abate the opioid epidemic,” said Mr. Tong. “Preserving Purdue’s ability to continue selling opioids as a public benefit corporation is simply unacceptable. The timing of this agreement mere weeks before the election raises serious questions about whether DOJ political leadership was negotiating in the best interest of the American public.”

Sackler Money Siphoned Funds to Avoid Paying More

Court documents show that Sackler family members withdrew more than $10 billion from Purdue Pharma and put it in family trusts just as Purdue faced legal troubles related to its role in the U.S. opioid epidemic.

A Sackler family spokesman defended those withdrawals, their actions with Purdue Pharma, their agreement with the DOJ.

A Sackler family statement read: “Members of the Sackler family who served on Purdue’s board of directors acted ethically and lawfully, and the upcoming release of company documents will prove that fact in detail. This history of Purdue will also demonstrate that all financial distributions were proper.”

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