OxyContin maker Purdue Pharma to plead guilty to charges

October 21, 2020

By a Biometrica staffer

Drugmaker Purdue Pharma LP will plead guilty to federal criminal charges as part of a settlement of more than $8 billion, the US Department of Justice said in a statement. Purdue is the company behind the powerful prescription painkiller OxyContin that experts say helped touch off an opioid epidemic, the Associated Press reported.

The company has agreed to plead guilty to a three-count felony – one count of dual-object conspiracy to defraud the US and violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

As part of the resolution, Purdue is admitting that it impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company’s manufacturing quotas.

Purdue is also admitting to violating federal anti-kickback laws by paying doctors, through a speaking program, to induce them to write more prescriptions for its opioids and for using electronic health records software to influence the prescription of pain medication, according to the officials.

The pharma company will make a direct payment to the government of $225 million, which is part of a larger $2 billion criminal forfeiture. In addition, it also faces a $3.54 billion criminal fine, though that money probably will not be fully collected because it will be taken through a bankruptcy, which includes a large number of other creditors, including thousands of state and local governments. Purdue will also agree to $2.8 billion in damages to resolve its civil liability.

Part of the money from the settlement will 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 states oppose, AP reported. The resolutions with Purdue are subject to the approval of the bankruptcy court.

The deal does not release any of the company’s executives or owners — members of the wealthy Sackler family — from criminal liability, and a criminal investigation is ongoing. Family members said they acted “ethically and lawfully,” but some state attorneys general said the agreement fails to hold the Sacklers accountable, AP added in its report.

With this deal, Purdue will become a public benefit company and the Sacklers will lose all control over it – a move already in the works. A public benefit company refers to one that will be governed by a trust that has to balance the trust’s interests against those of the American public and public health.

The settlement is the highest-profile display yet of the federal government seeking to hold a major drugmaker responsible for an opioid addiction and overdose crisis linked to more than 470,000 deaths in the country since 2000, AP reported.

“With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis,” said Deputy Attorney General Jeffrey A. Rosen.