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Purdue Pharma Reaches $8B Opioid Deal With Justice Department Over OxyContin Sales

Oct 21, 2020
Originally published on October 21, 2020 6:04 pm

Updated at 12:14 p.m. ET

The Justice Department announced on Wednesday a global settlement of civil and criminal investigations into Purdue Pharma's aggressive marketing of opioid medications, including OxyContin.

Federal officials have long maintained Purdue's actions helped fuel a prescription opioid epidemic that has killed more than 232,000 Americans, according to the Centers for Disease Control and Prevention.

But the deal unveiled Wednesday morning, which includes three felony guilty pleas, won't result in company officials or members of the Sackler family, who own Purdue Pharma, serving prison time. However, Justice Department officials said this deal doesn't preclude future criminal prosecutions of individuals involved in Purdue Pharma's opioid marketing practices. They said those separate investigations are ongoing.

During a press conference, Deputy Attorney General Jeffrey A. Rosen said the settlement would "redress past wrongs."

The controversial settlement, valued at more than $8.3 billion, would restructure Purdue Pharma, which entered bankruptcy last year. Going forward, the company would operate as a public trust under government control, continuing to manufacture opioid medications.

The Justice Department also said much of this settlement will help states and communities, providing them with "extraordinary new resources" for treatment of people suffering addiction.

In recent days, critics worked to head off this deal even before it was made public, saying it would entangle the government in a risky drug-making operation without holding the company or its owners accountable.

In a letter sent last week to Attorney General William Barr, 25 state attorneys general urged the Justice Department to "avoid having special ties to an opioid company" that "caused a national crisis."

Nearly three dozen Democratic members of Congress also sent a letter to Barr last week insisting any resolution of Purdue Pharma's role in the opioid crisis result in prison time for company owners and executives.

"Purdue and the Sackler family perpetrated one of the most egregious criminal acts in American history," lawmakers argued in the letter, calling for more aggressive prosecutions.

This deal, if finalized by Judge Robert Drain, the federal bankruptcy judge overseeing Purdue Pharma's dissolution, will almost certainly derail thousands of separate lawsuits against the company filed by local and state governments.

It could also shelter the personal assets of members of the Sackler family from future liability for their role in the opioid crisis.

New York Attorney General Letitia James sued the Sacklers directly last year.

Her lawsuit claims some family members pocketed billions of dollars in profits over the last two decades, stashing much of it in offshore accounts before the company filed for Chapter 11 protection in 2019.

James responded to the Justice Department's deal on Wednesday, saying in a written statement that "[w]hile 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. 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."

She went on to say that the settlement "allows billionaires to keep their billions without any accounting for how much they really made. From the beginning, we've aimed to unearth how much the Sacklers actually profited and how much they continue to hide away. While no amount of money can ever compensate the pain that so many now know, we will continue to litigate our case through the courts to secure every cent we can to limit future opioid addictions. We are committed to holding the Sacklers and others responsible for the role they played in fueling the opioid crisis."

One other controversial provision of this settlement is the Justice Department's request to the judge that Purdue and the Sacklers be protected from disclosing some internal information to creditors, including state officials.

First reported by The Wall Street Journal, federal attorneys hope to keep secret disclosures that Purdue Pharma made about company activities to the Justice Department while negotiating this settlement.

That maneuver echoes an earlier deal between Purdue Pharma and the Justice Department reached in 2007.

That settlement — widely considered a missed opportunity by the Justice Department — required the company to pay out roughly $645 million in fines because of illegal opioid marketing practices.

But details of those activities were never made public, and Purdue Pharma quickly resumed its aggressive sales of OxyContin and other highly addictive medications.

Those practices continued for another decade, generating billions of dollars in profits even as overdose deaths skyrocketed.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

ARI SHAPIRO, HOST:

The opioid crisis in America has killed more than 450,000 people. And now one of the companies that created the crisis is having to give back. The Justice Department today announced what they are calling a historic settlement with Purdue Pharma. That's the company that makes the highly addictive opioid medication OxyContin. Purdue will plead guilty to three criminal charges and pay more than $8 billion to help communities hurt by the addiction crisis. Critics say this doesn't go far enough to punish the owners of Purdue Pharma. NPR addiction correspondent Brian Mann joins us to talk about this.

Hi, Brian.

BRIAN MANN, BYLINE: Hi. How are you?

SHAPIRO: All right. This has been a long time coming. What does Purdue Pharma admit doing wrong in this agreement?

MANN: (Inaudible) has this really troubled history. They've had run-ins with the law in the past. And in this case, what they admit is that in just the last few years, they worked to convince doctors to overprescribe their opioid medications. They also misled the DEA about their internal controls that were supposed to make sure opioids didn't wind up in the wrong hands. In fact, a lot of Purdue's drugs were diverted and misused. So Jeffrey Rosen, the assistant U.S. attorney general, said today the punishment will be severe, totaling more than $8.3 billion in civil and criminal penalties.

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JEFFREY ROSEN: The resolution here is very significant. It involves, for the company, three felony guilty pleas. For both the company and the shareholders, it involves very sizable amounts of money.

MANN: And I should say that the Sackler family, who own Purdue Pharma, have also agreed to give up control. If this deal is finalized, it would, in the future, be run as a kind of public trust, a public benefit corporation, again, if this is finalized.

SHAPIRO: Let's talk more about the Sackler family. They became one of the richest families in America by selling OxyContin and other opioid medications. And according to some government officials, they pulled billions of dollars out of Purdue Pharma before the company went into bankruptcy. What punishment will the family face?

MANN: Well, the family has agreed to pay roughly $225 million out of their personal wealth. Critics of the deal say that's not nearly enough given the amount of damage that Purdue Pharma's practices caused to people's lives over the years. Here's Josh Stein. He's North Carolina's state attorney general. He spoke today with NPR.

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JOSH STEIN: The Sackler family extracted more than $10 billion out of Purdue Pharma, and they are walking away essentially unscathed. They simply must be forced to pay.

MANN: Stein and a couple of dozen other state attorneys general have gone on record opposing this Justice Department deal. They're hoping a federal bankruptcy judge who's overseeing Purdue Pharma's case will reject the deal.

SHAPIRO: Brian, help us understand. Government officials have said that the pharmaceutical industry acted like drug dealers pushing these opioid medications. The company now is admitting to criminal wrongdoing. Lots of drug dealers are in prison. Why isn't anyone going to prison in this case?

MANN: Yeah. There's a lot of public outrage over this. The simple reality is that proving criminal wrongdoing involving corporations is really difficult. It's very different from civil trials, where the burden of proof is much easier. I spoke about this with Adam Zimmerman today. He's a law professor at Loyola University who follows opioid litigation. He says it is meaningful that the Justice Department is still investigating personal conduct by some of the individuals at Purdue Pharma. U.S. attorneys say they could theoretically bring more criminal charges later.

ADAM ZIMMERMAN: I think we should be upset if the story ended here. If this was all that happened, then we really should be upset. But tomorrow's another day. You know, the federal government hasn't precluded the idea that they might bring criminal cases later on. The state AGs are still investigating criminally, so the story isn't over.

MANN: And I should say that New York's Attorney General Letitia James came out today and said, in fact, her probe of the Sacklers will continue.

SHAPIRO: You know, the opioid addiction crisis itself has been overshadowed by the pandemic, but it has certainly not gone away. Can you tell us more about what's happening right now and whether this money could help communities that are struggling with addiction?

MANN: Yeah. Things are still really bad. The federal government says more than 72,000 people died last year from overdoses around the country, many of those involving opioids, so this epidemic is still raging. If this money begins to flow through this settlement, it could bring relief. The problem is that everyone agrees it's not enough. The total cost of the opioid epidemic will likely run into the hundreds of billions of dollars. So while $8 billion sounds like a lot, it doesn't match up against the human cost of these drugs.

SHAPIRO: That's NPR's Brian Mann, our addiction correspondent, talking about today's Justice Department settlement with Purdue Pharma.

Thanks, Brian.

MANN: Thank you.

(SOUNDBITE OF XKAZ SONG, "MISS U AGAIN") Transcript provided by NPR, Copyright NPR.