Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to three federal criminal charges for its role in creating the nation’s opioid crisis and will pay more than $8 billion and close down the company. The money will go to opioid treatment and abatement programs. The privately held company has agreed to pay a $3.5 billion fine as well as forfeit an additional $2 billion in past profits, in addition to the $2.8 billion it agreed to pay in civil liability. Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott said:
Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted.
Because Purdue doesn’t have $8 billion in cash available to pay the fines, the company will be dissolved as part of the settlement. Purdue’s assets will be used to create a new “public benefit company” controlled by a trust or similar entity designed for the benefit of the American public. The Justice Department said the new company will function entirely in the public interest rather than to maximize profits. Future earnings from the new company will go to paying the fines and penalties, which in turn will be used to combat the opioid crisis.
That new company will continue to produce painkillers such as OxyContin, as well as drugs to deal with opioid overdose. Deputy Attorney General Jeffrey Rosen, who announced the settlement, defended the plans for the new company to continue to sell that drug, saying there are legitimate uses for painkillers such as OxyContin.
The plan is for the company to make life-saving overdose rescue drugs and medically assisted treatment medications available at steep discounts to communities dealing with the opioid crisis.
The Justice Department also reached a separate $225 million civil settlement with the Sackler family, the former owners of Purdue Pharma. The Sackler family – as well as other current and former employees and owners of the company – will still face the possibility that federal criminal charges will be filed against them.
Purdue, which filed for bankruptcy in 2019, pleaded guilty to violating federal anti-kickback laws, as it paid doctors to write more opioid prescriptions.
As the public now knows all too well, abuse of prescription painkillers is a major cause of the nation’s opioid crisis. According to the Centers for Disease Control and Prevention (CDC), 450,000 people died in the United States in the 10 years starting in 1999 from overdoses involving any opioid, including prescription and illicit opioids. And about a third of those deaths in 2018 involved prescription opioids.
Although the more than $8 billion in fines and penalties in the agreement is a record to be paid by a pharmaceutical company, it is only a fraction of what it has cost federal, state and local governments to combat the opioid crisis. States across the country have filed claims topping $2 trillion in the Purdue Pharma bankruptcy case.
Some states are objecting to the settlement. Twenty-five state attorneys general wrote to U.S. Attorney General William Barr in late October arguing against the plan to create a government-controlled company out of the assets of Purdue Pharma, saying that the government should not be in the business of selling OxyContin. It will be interesting to see how this plays out. The settlement needs the approval of the bankruptcy court for it to go into effect.
Beasley Allen’s Opioid Litigation Team
Beasley Allen’s Opioid Litigation Team includes Rhon Jones, Parker Miller, Ken Wilson, David Diab, Rick Stratton, Will Sutton, Jeff Price, Gavin King and Tucker Osborne. This team of lawyers represents the State of Alabama, the State of Georgia, and numerous local governments and other entities, as well as individual claims on behalf of victims.
This story appears in the November 2020 issue of The Jere Beasley Report. There is a lot more news about the ongoing opioid litigation in this month’s Report. For more like this, visit the Report online and subscribe.