Purdue to pay $8.3bn after admitting criminal charges in opioid case

After years of legal wrangling, Purdue Pharma has agreed a deal to resolve litigation about its role in the US opioid epidemic that will cost it up to $8.3 billion.

As part of the criminal and civil settlement, the manufacturer of opioid painkiller OxyContin (oxycodone) pleaded guilty to a three-count felony, including two counts of violating anti-kickback laws and one of conspiracy to defraud the US government.

Purdue faces a criminal fine of $3.54 billion, $2 billion in forfeited assets, and $2.8 billion in civil damages to states affected by the opioid crisis, which the Department of Justice said was the largest penalties ever levied against a pharmaceutical manufacturer.

In a related settlement, the billionaire Sackler family that own the company agreed to pay $225 million to resolve civil claims.

There was however opposition to the plea deal even before it was formally announced. Late last week, 38 Democrat lawmakers delivered a letter to US Attorney General William Barr saying it wasn’t right that  the criminal liabilities would be resolved “without a single person serving a day in prison.”

“If the only practical consequence of your Department’s investigation is that a handful of billionaires are made slightly less rich, we fear that the American people will lose faith in the ability of the Department to provide accountability and equal justice under the law,” they wrote.

The DoJ insists the deals don’t release any executives or employees of Purdue or members of the Sackler family from any future criminal liability.

Meanwhile, they are still facing thousands of lawsuits brought by local governments across the US claiming that aggressive marketing of OxyContin fuelled an epidemic in addiction that has claimed hundreds of thousands of lives.

Purdue filed for bankruptcy last year, after it proposed a separate $10 to $12 billion settlement package to resolve those lawsuits.

The DoJ resolution still has to be approved by the bankruptcy court, and one stipulation is that Purdue will stop operating in its current form and emerge from the procedure as a public health organisation functioning “entirely in the public interest,” according to prosecutors.

Another condition is that the Sackler family give up control of Purdue, which is intended to re-emerge after the bankruptcy process with a focus on developing drugs to treat opioid addiction and reverse overdoses that would be provided at very low cost.

In a statement, the drugmaker said the latest agreement brings it closer to the goal of “delivering more than $10 billion in value to address the opioid crisis,” adding that the “overwhelming majority” of the pay-out will be directed to state, local and tribal governments that have been left to deal with the consequences of the epidemic.

Abuse of opioid drugs “remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary Cantrell, deputy inspector general for investigations at the Department of Health and Human Services (DHHS) Office of Inspector General.

“Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being,” he added.

Purdue’s admission of criminal activity centres on its insistence to the US government that it was operating an anti-diversion programme for opioids, when in reality it was continuing to sell them to doctors who were clearly over-prescribing and diverting the drugs between May 2007 and March 2017.

It admitted to bribing two doctors to write more prescriptions of OxyContin as well as other drugs between June 2009 and March 2017.

The Sackler family also released a statement after the news emerged, claiming that the “proposed resolution includes relinquishing our ownership of Purdue and has been valued at $10-$12 billion – more than double all Purdue profits the Sackler family retained since the introduction of OxyContin.”

The family says it will contribute $3 billion to the proposed settlement offered to state, local and tribal governments as well as handing over Purdue itself, but there still seems to be considerable opposition to the package.

Image by Gerd Altmann from Pixabay