Oct 21, 2020 - Health

OxyContin maker Purdue Pharma to plead guilty to 3 criminal charges

Bottles of OxyContin

Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a rally and die-in last year outside New Yorks Southern District Federal Court in White Plains, where Purdue Pharmaceuticals' bankruptcy hearing was being held. Photo: Erik McGregor/LightRocket via Getty Images

Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to three federal criminal charges and close the company as part of an $8.3 billion settlement, the Justice Department announced Wednesday.

Why it matters: The settlement marks a significant step in the federal government's efforts to hold a major drugmaker responsible for the country's opioid crisis, which has been linked to hundreds of thousands of deaths.

Details: The company agreed to plead guilty to charges including conspiracy to defraud the United States and violating federal anti-kickback laws, DOJ officials said.

  • The company, which filed for bankruptcy in 2019, has also agreed to a $3.544 billion criminal fine and a $2 billion criminal forfeiture.
  • "Further, to resolve its civil liability, Purdue Pharma has agreed to $2.8 billion in damages to the United States," Deputy Attorney General Jeffrey Rosen said in announcing the settlement.
  • "The agreed resolution, if approved, will require that the company must dissolve and no longer exist in its present form, the Sacklers must relinquish all ownership and control of the company (and its successors), and the assets must be transferred to a new public benefit company or PBC owned by a trust for the benefit the American public," Rosen added.
  • "If the bankruptcy court approves this, the department will credit the company for the value conferred through the PBC against the criminal forfeiture amount, except for $225 million that will be paid to the United States on the bankruptcy effective date."
  • The deal doesn't shield any of the company's owners or executives —  including members of the Sackler family — from criminal liability. Members of the family agreed to pay a separate $225 million civil penalty.

Steven Miller, who became chairman of the company’s board in 2018, said in a statement: “Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts."

  • He added, "Purdue today is a very different company. We have made significant changes to our leadership, operations, governance, and oversight."

What they're saying: "Purdue Pharma actively thwarted the United States' efforts to ensure compliance and prevent diversion," Drug Enforcement Administration Assistant Administrator Tim McDermott said at a news conference.

  • "The devastating ripple effect of Purdue's actions left lives lost and others addicted," McDermott said.
  • Rosen added, "Keeping the American people safe is the Department of Justice’s highest priority.  As today’s announcement re-affirms, the department will not relent in our efforts to combat the opioids crisis."

Yes, but: Several states had previously objected to the deal.

  • 25 state attorneys general wrote to Attorney General Bill Barr last week, arguing that the company should not be converted into a public benefit corporation.
  • "[S]elling the business to a private owner may also deliver more upfront money that cities and states can use to abate the opioid epidemic," the officials wrote.
  • "[T]he 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," the added.
  • The letter said that at least one potential buyer had already come forward.

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