OxyContin maker agrees to $8B settlement with Trump administration

Purdue Pharma, the company that manufactures the powerful opioid OxyContin, will plead guilty to three federal charges as part of a larger $8 billion settlement arrangement, the Justice Department said Wednesday.

Deputy Attorney General Jeffrey Rosen said Purdue has agreed to plead guilty in federal court in New Jersey to conspiracy to defraud the United States and two counts of conspiracy to violate anti-kickback laws.

OxyContin is widely blamed for starting the country’s opioid crisis that’s killed more than 400,000 Americans over the past two decades.

The settlement announced Wednesday includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.55 billion and an additional $2 billion in criminal forfeiture. 

The Justice Department said Purdue will pay just $225 million of the forfeiture amount on the day of effective bankruptcy. The rest would be earmarked for the municipalities, states and tribes that are also suing Purdue.

The federal agreement is separate from other litigation. Purdue and other opioid manufacturers, distributors and pharmacies are facing lawsuits from virtually every state in the country, as well as thousands of cities, counties, Native American tribes and others seeking restitution for the opioid epidemic. 

The civil settlement resolves allegations that the Sackler family, which owns Purdue Pharma, knew in 2012 that the legitimate market for Purdue’s opioids had contracted, but they pressured Purdue executives to recapture lost sales and increase Purdue’s share of the opioid market by marketing OxyContin to “extreme, high-volume prescribers,” the DOJ said.

Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act.

The settlement does not prohibit any future criminal or civil penalties against the company, Rosen said, but Purdue filed for bankruptcy last year with a long line of creditors, and experts don’t expect the company will pay close to the full amount.

The announcement, less than two weeks before Election Day, will allow President Trump to claim a major victory in combating the opioid epidemic, something he campaigned heavily on ahead of the 2016 election.

The COVID-19 pandemic has largely pushed the opioid epidemic to the back burner, even as opioid deaths have climbed. 

As part of the agreement, the Sacklers will forfeit ownership of the company and it will be dissolved into a government-owned “public benefit company.” It will still sell OxyContin, but also produce anti-overdose drugs and opioid treatment medications.

Last week, a group of 25 state attorneys general wrote to U.S. Attorney General William Barr urging him not to accept such a move, which was reportedly pushed by the Sackler family.

“A business that killed thousands of Americans should not be associated with government. Instead, the business should be sold to private owners, so the government can enforce the law against it with the same impartiality as for any other company,” the letter stated.

New York Attorney General Letita James (D), who signed the letter last week, also objected to Wednesday’s settlement because it did not account for the billions of dollars the Sacklers directed away from Purdue. 

“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,” James said in a statement.

Rosen defended the move, saying the DOJ investigated “specific acts of wrongdoing” and the agreement was proportional to the crimes.

“There is no law that says if you’ve done something wrong we should just simply strip somebody of all their assets in existence, that’s not how it works,” Rosen said. 

“I think by any measure, a resolution of the company that involves criminal and civil resolutions in excess of $8 billion, that involves the felony guilty pleas, that involves financial contributions from shareholders on the civil side and that involves divesting the shareholders of any ownership … those are extremely significant and serious measures,” Rosen said.

But when asked, Rosen declined to say why the DOJ didn’t pursue criminal charges against the Sacklers, saying only that the civil resolution doesn’t absolve them from other legal claims.