Purdue Pharma Pleads Guilty for Role in Opioid Crisis, Ushering in New Chapter

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Days after Purdue Pharma reached a combined $8.4 billion criminal and civil settlement with the U.S. Department of Justice, the OxyContin drugmaker pleaded guilty to three criminal charges to resolve its role in the ongoing opioid crisis in the United States.

Purdue Pharma board chairman Steve Miller appeared on behalf of the company during a virtual hearing and pleaded guilty, CNN reported. Purdue pleaded guilty to 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 charges were initially agreed to in October and bring to an end the years-long civil and criminal investigation into the company’s marketing practices for OxyContin. The plea covers the company’s conduct from May 2007 to March 2017.

Under terms of the guilty plea, Purdue accepted responsibility for its actions and agreed to a settlement that includes a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. From the additional $2 billion, Purdue will pay the federal government $225 million, the DOJ said. The company also agreed to a civil settlement that includes $2.8 billion to settle liability under the False Claims Act. The Sackler family, the majority owners of privately-held Purdue, agreed to pay $225 million in damages to resolve its civil False Claims liability.

“As today's plea to felony charges shows, Purdue put opioid profits ahead of people and corrupted the sacred doctor-patient relationship,” Christina Nolan, U.S Attorney for the District of Vermont, said in a statement. “We hope the company's guilty plea sends a message that the Justice Department will not allow big pharma and big tech to engage in illegal profit-generating schemes that interfere with sound medicine."

The guilty plea paves the way forward for the company’s next chapter, a reorganization that will transfer all of Purdue’s assets to a public benefit company. The new company will be governed by a board selected by the claimants and approved by the bankruptcy court. When the new company is formed, it will contribute “tens of millions of doses” of opioid overdose reversal medications and treatments aimed at opioid addiction at little or no cost, such as nalmefene and naloxone. Purdue filed for Chapter 11 bankruptcy in September 2019 after reaching a tentative $12 billion settlement agreement with various state governments to settle the company’s involvement in the opioid health care crisis.

When Purdue morphs into the new company, it will function entirely in the public interest. Earnings will be used to pay the fines and penalties assessed against the company. Those monies will be earmarked to combat the opioid crisis across the country.

In a brief statement, Purdue said it is taking responsibility for the past conduct of the company that included efforts to encourage doctors to prescribe the opioid painkiller. Court documents released in 2018 revealed that Richard Sackler, a former Purdue president, called for a “blizzard of prescriptions” during a launch party for OxyContin shortly after the drug had been approved by the U.S. Food and Drug Administration.

"Having our plea accepted in federal court, and taking responsibility for past misconduct, is an essential step to preserve billions of dollars of value for creditors and advance our goal of providing financial resources and lifesaving medicines to address the opioid crisis,"  Purdue said in its statement to CNN. "We continue to work tirelessly to build additional support for a proposed bankruptcy settlement, which would direct the overwhelming majority of the settlement funds to state, local and tribal governments for the purpose of abating the opioid crisis."