Purdue Pharma must pay $8B
Tong blasts Department of Justice settlement over opioid probe, says it shortchanges victims
Connecticut Attorney General William Tong Wednesday decried a settlement agreement between the U.S. Department of Justice and Stamford-based Purdue Pharma that ends sweeping criminal and civil investigations into the drugmaker, saying it shortchanges victims of the opioid epidemic and fails to hold the Sackler family that controlled the company criminally responsible.
“This settlement provides a mere mirage of justice for the victims of Purdue’s callous misconduct. The federal government had the power here to put the Sacklers in jail, and they didn’t. Instead, they took fines and penalties that Purdue likely will never fully pay,” Tong, who has an ongoing lawsuit against
Purdue, said in a written statement after the DOJ announcement. “Every dollar paid here is one dollar less for states like Connecticut trying to maximize money from Purdue and the Sacklers to abate the opioid epidemic.”
The $8.3 billion settlement, which saw the company plead guilty to charges of defrauding the U.S. and violating anti-kickback laws, was heralded by the DOJ as the largest penalties ever levied against a pharmaceutical company as the federal government resolves sweeping criminal and civil investigations involving the OxyContin maker that is accused of helping spur the deadly opioid epidemic.
It includes more than $3.5 billion in penalties and $2 billion in forfeitures, but with the company in Chapter 11 proceedings, the resolutions face approval from a bankruptcy judge. It remains unclear what amount of money will actually go toward the fight against opioid addiction.
The DOJ said the agreement does not preclude future criminal charges against company executives, board members or the founders and owners, the Sackler family.
Central to the agreement is that Purdue will cease to operate as is and instead leave bankruptcy as a public benefit company, providing donations or steep discounts on anti-overdose drugs and giving proceeds to state and local government efforts to stem the opioid epidemic.
This measure met substantial resistance from a coalition of 25 attorneys general, who wrote a recent letter to U.S. Attorney General Barr demanding that DOJ not preserve the company as a public trust, but allow it to be sold.
“Preserving Purdue’s ability to continue selling opioids as a public benefit corporation is simply unacceptable,” Tong said Wednesday. “The timing of this agreement mere weeks before the election raises serious questions about whether DOJ political leadership was negotiating in the best interest of the American public.”
As part of the criminal plea, Purdue will admit that it lied to the Drug Enforcement Administration that it maintained effective programs to stop drug diversion, when in fact it continued to market Oxycontin to prescribers who were, in fact, diverting the drug. Drug diversion, where legitimate prescription drugs are funneled toward illicit use, is seen as part of what spurred the long-running opioid crisis.
Purdue also will admit to using payments through the company’s speakers program to induce doctors to write more prescriptions, DOJ said.
The Connecticut attorney general’s office first sued Purdue Pharma in 2018 under then-Attorney General George Jepsen to hold the company and the Sackler family accountable for its role in an epidemic that has killed thousands in Connecticut. In 2019, Tong’s office filed an amended complaint that charged company executives, board members, the Sackler family and its associated companies channeled hundreds of millions of dollars to the Sacklers to avoid financial liability.
Tong’s office continues to pursue its suit against the company, but efforts have been put on hold during the bankruptcy proceedings, they said. A number of towns and cities in Connecticut have likewise sued the drugmaker.
Purdue last year announced a settlement agreement in the face of thousands of lawsuits that the company claims would put upwards of $10 to $12 billion toward the opioid epidemic, and included a $3 billion commitment from the Sackler family. The company subsequently filed for bankruptcy, it said, in an effort toward that reaching that settlement.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” Steve Miller, who became chairman of the company’s board in 2018, said in a statement Wednesday. No members of the Sackler family remain on that board, though they still own the company.
Family members, in a statement, expressed “deep compassion for people who suffer from opioid addiction and abuse and hope the proposal will be implemented as swiftly as possible to help address their critical needs.”