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OxyContin Maker to Take Plea on Federal Criminal Charges

— Critics say Sackler family, Purdue Pharma execs will walk away unscathed

MedpageToday
A photo of hands gathering $100 bills superimposed over a bottle of Oxycontin tablets

With less than 2 weeks until Election Day, the with Purdue Pharma and members of the Sackler family over their roles in the country's opioid abuse crisis.

Purdue will plead guilty to three federal criminal charges and pay a criminal fine of $3.5 billion with an additional $2 billion in criminal forfeiture -- ultimately turning the company into a public trust. Another $2.8 billion will be paid to resolve civil allegations, and the Sackler family, which owns privately-held Purdue, will pay $225 million to settle separate civil allegations.

"Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts," said Purdue's board chairman, Steve Miller, . The settlement must be approved by the bankruptcy court overseeing Purdue's reorganization. The company had filed a .

While the DOJ has left the door open to future prosecution of members of the Sackler family or company executives, critics have blasted the feds for not holding them accountable now.

"The Sacklers are getting off scot-free," said Andrew Kolodny, MD, of Brandeis University in Waltham, Massachusetts, a long-time critic of opioid prescribing. "A $225-million contribution from people who earned billions from a criminal enterprise is not a deterrence. Fines and settlements are seen as a cost of doing business."

"If it were going to happen, it would be announced today. Why wait?" Kolodny said. "The Sacklers may literally be getting away with not murder, but mass manslaughter."

Attorneys general from several states -- many of whom signed on to last week -- similarly railed against not holding the Sacklers or Purdue executives personally accountable.

"This settlement provides a mere mirage of justice for the victims of Purdue's callous misconduct," , attorney general of Connecticut, where Purdue has its headquarters. "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."

Massachusetts attorney general , "DOJ Failed. Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election."

Many believe the deal will enable the company to once again evade accountability, as it did in 2007 when it paid a $600 million fine and that it misled regulators, doctors, and patients about the risk of addiction with its flagship product OxyContin. While three executives also pled guilty to criminal charges of misbranding, they paid a combined total of $34.5 million in fines and never served jail time.

Critics are also concerned that "much of this $8 billion may never materialize," Kolodny said, as the company is in bankruptcy and faces a steep number of creditors, defending itself in more than 3,000 lawsuits.

The agreement calls for Purdue to be transformed into a public benefit company owned by a trust, with proceeds going to state and local opioid abatement programs. The DOJ said it would be willing to credit up to $1.775 billion against Purdue's $2-billion criminal forfeiture based on the value that could be conferred.

"By putting Purdue's product in a public trust, you're creating a perverse financial incentive," Kolodny said. "Instead the federal government should be doing everything they can to promote more cautious opioid prescribing."

In its criminal pleas, Purdue will admit that it conspired to defraud the U.S. by misrepresenting that it maintained an effective anti-diversion program when it continued to market opioid products to more than 100 healthcare providers whom the company had good reason to believe were diverting opioids.

It will also admit to conspiring to violate the Federal Anti-Kickback Statute by making payments to two doctors through its speaker program to induce other doctors to write more prescriptions for Purdue opioids, and for paying the electronic health records company Practice Fusion to promote orders for its extended-release opioid drugs. That company previously paid $145 million to settle kickback charges.

The civil settlement resolves allegations around false claims made to Medicare and Medicaid; promoting opioids to healthcare providers for purposes it knew would lead to abuse and diversion; paying doctors for educational talks that boosted prescribing; paying kickbacks to Practice Fusion; and making contracts with specialty pharmacies to fill prescriptions for opioids that other pharmacies rejected.

In a separate civil settlement, the "named Sacklers" -- Richard Sackler, David Sackler, Mortimer Sackler, Kathe Sackler, and Jonathan Sackler -- will pay $225 million to resolve allegations around the company's 2013 "Evolve to Excellence" program, which intensified the marketing of OxyContin as sales were falling amid the opioid crisis. It also resolves allegations that the Sacklers transferred assets into family holding companies and trusts to hide them from future creditors.

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    Kristina Fiore leads ֱ’s enterprise & investigative reporting team. She’s been a medical journalist for more than a decade and her work has been recognized by Barlett & Steele, AHCJ, SABEW, and others. Send story tips to k.fiore@medpagetoday.com.