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Analysis

Purdue Pharma to Pay $8B to Settle Criminal, Civil Charges for Key Role in Opioid Epidemic

By John Commins  
   October 21, 2020

The settlement does not release from further criminal charges the Sackler family, owners of Purdue, nor any of company's executives or employees.

OxyContin maker Purdue Pharma will pay $8 billion and dissolve as a company in a deal to settle civil and criminal charges for its decade-long leading role in fueling the nation's opioid crisis that has claimed hundreds of thousands of lives, the Department of Justice announced Wednesday.

Under a deal reached with federal prosecutors in New Jersey, and subject to the approval of a bankruptcy court, Purdue will plead to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute, for violations that occurred between 2007 and "at least March, 2017," DOJ said.

"It is important to note that this resolution does not prohibit future criminal or civil penalties against Purdue Pharma's executives or employees," Deputy U.S. Attorney General Jeffrey Rosen said in remarks accompanying the announcement.

The settlement includes a criminal fine of $3.5 billion and $2 billion in criminal forfeiture, and a civil settlement of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability, DOJ said.

Federal prosecutors hailed the settlement the largest penalty ever levied against a drug maker. However, the $8 billion forfeiture is dwarfed by the societal costs of the opioid epidemic, which has claimed hundreds of thousands of lives over the past 20 years.

The Centers for Disease Control and Prevention has estimated that the "economic burden" of opioid epidemic is $78.5 billion a year, which includes the costs of healthcare, lost productivity, addiction treatment, and criminal prosecutions.

"Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts," Steve Miller, who joined Purdue's Board as Chairman in July 2018, said in prepared remarks.

Purdue said new company will emerge from bankruptcy as a "public benefit company, created and operated "for the benefit of claimants and the American people" under a new owner, with new trustees  "to provide for free or at cost millions of doses of lifesaving opioid addiction treatment and overdose reversal medicines."

"Resolving the DOJ investigations is an essential step in our bankruptcy process," Miller said. "The settlement agreement will pave the way for Purdue to submit a plan of reorganization to the bankruptcy court that will transfer all of Purdue’s assets to a public benefit company, and ultimately deliver more than $10 billion in value to claimants and communities."  

“It is important to note that this resolution does not prohibit future criminal or civil penalties against Purdue Pharma's executives or employees.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: October 21, Ogden Utah USA- OxyContin bottles sit on counter which is a famous drug in the current news for causing overdose and addiction. PureRadiancePhoto / Shutterstock


KEY TAKEAWAYS

Purdue will plead to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

The settlement includes a criminal fine of $3.5 billion and $2 billion in criminal forfeiture, and a civil settlement of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

Federal prosecutors hailed the settlement the largest penalty ever levied against a drug maker. However, the $8 billion forfeiture is dwarfed by the societal costs of the opioid epidemic, which has claimed hundreds of thousands of lives over the past 20 years.

The Centers for Disease Control and Prevention has estimated that the "economic burden" of opioid epidemic is $78.5 billion a year, which includes the costs of healthcare, lost productivity, addiction treatment, and criminal prosecutions.


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