OxyContin manufacturer Purdue Pharma will plead guilty to three criminal charges and pay $8 billion for its role in fueling America’s opioid epidemic, Justice Department officials said Wednesday.
It is the most aggressive action yet taken by the federal government against a major opioid manufacturer in the addiction and overdose crisis that has killed more than 470,000 people across the country since 2000.
“This resolution does not provide anybody with a pass on the criminal side,” Rachel Honig, an assistant U.S. attorney in New Jersey, told reporters Wednesday.
The deal does not release from criminal liability any of Purdue Pharma’s executives or owners, including members of the wealthy Sackler family. A criminal investigation is ongoing, Justice Department officials said.
In a statement, the Sackler family said its members on Purdue’s board of directors acted “ethically and lawfully,” which will be proven in the upcoming release of company documents.
“We reached today’s agreement in order to facilitate a global resolution that directs substantial funding to communities in need, rather than to years of legal proceedings,” the statement read.
Under the agreement, Purdue will plead guilty to impeding the Drug Enforcement Administration’s investigation by reporting misleading information to the agency. It also will admit to paying kickbacks to doctors to entice them to write more opioid prescriptions and using electronic health record software to influence prescriptions.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” said Steve Miller, chairman of Purdue’s board.
The Connecticut-based company also will pay a total of $8 billion in fines. It will make a direct payment to the U.S. government of $225 million, which is part of a $2 billion criminal forfeiture.
Purdue also will pay a $3.54 billion criminal fine and $2.8 billion in damages to resolve civil liabilities.
It is not clear how much of the $8 billion actually will be collected since the company has declared bankruptcy and lacks the funds to repay all of its creditors. The company also faces thousands of lawsuits seeking damages related to the public health crisis that has ravaged the U.S.
The Justice Department is prepared to waive a large portion of the $2 billion forfeiture claim as long as Purdue meets certain conditions.
The first condition is that Purdue must divert funds to combating the opioid crisis to U.S. communities that have filed lawsuits against the company.
The second condition is that the company must reorganize as a “public benefit company” controlled by those communities and no longer controlled by the Sacklers.
The Sacklers already had agreed to hand over the company and pledged at least $3 billion to resolve thousands of lawsuits.
Purdue also would be required to cooperate with an ongoing federal investigation and other potential prosecutions.
Democrats, including New York Attorney General Letitia James, slammed the deal, saying it doesn’t go far enough to hold Purdue accountable and allows the Sacklers to escape with a slap on the wrist.
“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,” Ms. James said in a statement.
At a press conference, Deputy Attorney General Jeffrey Rosen defended the agreement, saying the Sacklers lost ownership of a company that “was worth very significant amounts of money.”
“Both the company and the shareholders are paying a very steep price for what occurred here. There is no law that says if you’ve done something wrong, we should just simply strip somebody of all their assets in existence,” Mr. Rosen said.
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