OxyContin maker Purdue Pharma has reached an $8 billion settlement with the U.S. Justice Department to end years-long criminal and civil investigations by federal prosecutors over the company’s allegedly deceptive marketing and distribution of its highly potent opioids. Purdue is blamed for its part in causing a national opioid epidemic that has killed more than 400,000 Americans over the past two decades. The company is pleading guilty to one count of defrauding the United States and two counts of anti-kickback-related charges.
The Sacklers, the billionaire family that owns the company, also agreed to pay an additional $225 million to resolve civil claims. The settlement does not protect family members or company executives from facing future prosecution.
The settlement amount is largely symbolic. Purdue filed for bankruptcy last year and doesn’t have the assets to cover the full $8 billion. The company has offered, as part of its bankruptcy proposal, to dissolve and turn itself into a new corporate trust with profits going back to the public.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen in a statement. “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.”
Purdue’s bankruptcy plan values its estate at $5 billion, which includes $3 billion pledged by the Sacklers. Some states opposing the plan say the Sacklers should pony up more money and are questioning the actual worth of the family. The Sacklers didn’t personally file for bankruptcy.
“While our country continues to recover from the pain and destruction left by the Sacklers’ greed, this family has attempted to evade responsibility and lowball the millions of victims of the opioid crisis,” New York Attorney General Letitia James said. “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. Instead, it allows billionaires to keep their billions without any accounting for how much they really made.”
Lawyers in Beasley Allen’s Toxic Torts Section are representing local governments holding opioid companies accountable for overdose deaths and economic damages in their communities caused by this crisis.