Purdue Pharma pleads guilty to role in opioid crisis, will pay $8 billion and close doors
Still, some attorneys general said the settlement didn't go far enough in punishing the company's owners.
The U.S. Department of Justice announced Wednesday it had closed criminal and civil investigations with Stamford-based Purdue Pharma and that the company had agreed to plead guilty to three federal criminal charges and pay more than $8 billion.
The resolution with the Big Pharma company, which has been under scrutiny from the federal government and dozens of attorneys general for how it marketed opioids, specifically OxyContin, is subject to the approval of a bankruptcy court. If approved, the company will dissolve, with its assets being used to create a “public benefit company” whose profits will be used to pay off the fines and combat the opioid crisis.
Related: Purdue Pharma files for bankruptcy
The company pleaded guilty to dual-object conspiracy to defraud the United States and to violate the Food, Drug & Cosmetic Act; conspiracy to violate the federal Anti-Kickback Statute related to Purdue’s payments to health care providers; and a conspiracy to violate the Anti-Kickback Statute related to Purdue’s payments to Practice Fusion, a cloud-based electronic health records platform.
State attorneys general, though, said not so fast, and criticized the agreement for not going far enough.
“This settlement provides a mere mirage of justice for the victims of Purdue’s callous misconduct. The federal government had the power here to put the Sacklers [owners of the company] in jail, and they didn’t,” Connecticut Attorney General William Tong said. “Instead, they took fines and penalties that Purdue likely will never fully pay. … 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 leadership was negotiating in the best interest of the American public.”
In a statement on its website, the company said it takes responsibility for its actions.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statements of fact,” said Steve Miller, who joined Purdue’s board as chairman in July 2018. “Resolving the DOJ investigations is an essential step in our bankruptcy process. The settlement agreement will pave the way for Purdue to submit a plan of reorganization to the bankruptcy court that will transfer all of Purdue’s assets to a public benefit company, and ultimately deliver more than $10 billion in value to claimants and communities.”
The settlement comes just one week after attorneys general from the District of Columbia and 24 states, including Connecticut, New York, New Jersey and California, sent a letter to U.S. Attorney General William Barr urging him not to finalize the proposal.
One major bone of contention for the states was the company’s ability to continue OxyContin sales as a public trust corporation.
“They can continue to do what they are doing with some changes and a different name and structure,” Tong said.
New York Attorney General Letitia James was among the critics who vowed to continue their litigation against the company, despite Wednesday’s announcement.
“Today’s deal doesn’t account for the hundreds of thousands of deaths or millions of addictions caused by Purdue Pharma and the Sackler family,” James said. “Instead, it allows billionaires to keep their billions without any accounting of how much they really made.”
The U.S. Justice Department said under the terms of the agreement the company will make a direct payment to the government of $225 million arising from the alleged misconduct of several members of the Sackler family. That $225 million, the government said, is part of a larger $2 billion criminal forfeiture. There is also a criminal fine of $3.54 billion and a civil settlement of $2.8 billion.
As part of the criminal plea, the government said Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. The government also said that “Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States.”
The government said greed motivated the company.
Steven D’Antuono, assistant director in charge of the FBI’s Washington, D.C., field office, said in a press release, “Purdue, through greed and violation of law, prioritized money over the health and well-being of patients.”
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