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Purdue Pharma pleads guilty to 3 criminal charges for opioid sales, but attorneys general and consumer groups say it’s not enough

Oxycodone White Two Pills With Gray BackgroundOpioid manufacturer Purdue Pharma has agreed to plead guilty to three criminal charges as part of a settlement of more than $8 billion, the U.S. Department of Justice announced Wednesday.

The agreement doesn’t include the criminal release of the company’s executives or owners, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases. The criminal investigation is ongoing.

The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer. The opioid addiction and overdose crisis is linked to more than 470,000 deaths in the nation since 2000.

The Purdue deal is subject to the approval by a bankruptcy court. 

Purdue will make a payment to the government of $225 million, which is part of a larger $2 billion criminal payment. In addition, Purdue also agreed to a $3.54 billion criminal fine, although it may not be paid due to its bankruptcy proceedings, which includes many other creditors, including thousands of state and local governments, officials said.

Purdue will also pay $2.8 billion in damages to resolve its civil liability.

Part of the money from the settlement would go to aid in medication-assisted treatment and other drug programs to combat the opioid epidemic. That part of the arrangement echoes the plan the company is pushing in bankruptcy court and which about half the suing states oppose.

Criminal pleas

Purdue will admit that it conspired to defraud the United States by telling the DEA that it maintained an effective anti-diversion program when it continued to market its opioid products to more than 100 health care providers who were diverting opioids, according to the agreement.

In addition, Purdue will admit to kickbacks, making payments to doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products.

Purdue also 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.

The Sacklers will lose control of Perdue Pharma and the company will emerge from bankruptcy as a public benefit company designed for the benefit of the American public.

The PBC will deliver prescription drugs, including opioids, and aim to donate, or provide discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, officials said.

The proceeds of the trust will be directed toward state and local opioid abatement programs.

Settlement criticisms  

Public Citizen, a consumer advocacy group, said Purdue Pharma is a bankrupt company that will operate as a social benefit corporation, or possibly not at all.

“Criminal charges for its wrongdoing are decades late and almost beside the point,” said Robert Weissman, president of Public Citizen.

Weissman said for there to be accountability for the opioid addiction epidemic there must be prosecution of the the Sackler family and other executives and owners, who were responsible for Purdue Pharma’s deadly deception.

“The DOJ should have prosecuted Purdue and its owners and executives back in 2007, the first time it brought charges against the company, instead of immunizing it with a non-prosecution agreement, as Public Citizen stated at the time,” he said.

The guilty plea comes too late for the millions of lives that Purdue’s crimes destroyed over the past decade, Weissman said.

New York Attorney General Letitia James said the deal doesn’t account for the hundreds of thousands of deaths or millions of addictions caused by Purdue Pharma and the Sackler family.

“Instead, it allows billionaires to keep their billions without any accounting for how much they really made,” James said.

From the beginning, attorneys general have aimed to unearth how much the Sacklers actually profited and how much they continue to hide away.

“While no amount of money can ever compensate the pain that so many now know, we will continue to litigate our case through the courts to secure every cent we can to limit future opioid addictions,” she said.

James said attorneys general are committed to holding the Sacklers and others responsible for the role they played in fueling the opioid crisis.

Connecticut Attorney General William Tong said 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,” Tong said.

Dozens of attorneys general have sued the Sacklers, and Purdue filed for bankruptcy in September 2019. Litigation against Purdue is currently on pause during the bankruptcy proceeding.

Tong joined a coalition of attorneys general last week calling on the DOJ to revise the settlement that preserves the company’s ability to continue OxyContin sales as a public trust corporation.

Lawyers for 2,800 local governments that are suing Purdue and other drug manufacturers, distributors, and pharmacies said in a statement that they supported the principle of the settlement, adding more work needs to be done.

Civil settlements

The department’s civil settlements resolve the DOJ’s charges against Purdue and its individual shareholders, members of the Sackler family.

Except for Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only, officials said. There has been no determination of liability in the civil matters.

The civil settlement with Purdue provides the United States with a bankruptcy claim for $2.8 billion. It resolves allegations that Purdue caused false claims to be submitted to federal health care programs.

The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.

It also resolves the government’s allegations that Purdue engaged in kickback schemes to induce prescriptions of its opioids.

Under a separate civil settlement, individual members of the Sackler family will pay $225 million because they knew that the market for Purdue’s opioids had shrunk, but they requested that Purdue executives recapture lost sales and increase Purdue’s share.

The new marketing was called “Evolve to Excellence.” Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts” as their peers.

The civil settlement also resolves the government’s allegations that at the Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were fraudulent transfers.

The settlement doesn’t resolve claims that states have against Purdue or members of the Sackler family, officials said.

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