Purdue Pharma, maker of the OxyContin painkillers, has agreed to plead guilty and settle criminal charges regarding its role in the US opioid crisis.
Under the $8.3 billion settlement agreement, Purdue Pharma will plead guilty to enabling the supply of drugs “without legitimate medical purpose”, which was instrumental to fueling the opioid crisis in the US.
Under the deal, Purdue will pay $225 million to the Justice Department and an additional $1.7 billion towards addressing claims made in other lawsuits.
It also involves a criminal fine of $3.54 billion and and $2.8 billion civil penalty, which will compete with other claims in bankruptcy court. The company’s owners, the Sackler family, has also agreed to pay $225 million and give up ownership of the firm.
While the agreement addressed some of most serious charges against the drug maker, Purdue Pharma still faces thousands of cases filed by states and families.
However, the pharmaceutical firm called the settlement an “essential” step to wider resolution of the matter.
Purdue Pharma Chairman of the Board Steve Miller said: “Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice.”
Miller joined Purdue’s board as chairman in July 2018, several months before the company filed for bankruptcy to seek protection from the litigation. The company’s Chapter 11 bankruptcy filing was approved by the board on September 15, 2019.
The drug maker was said to have played a large role in the opioid crisis through the sale of drugs such as the painkiller OxyContin. The Sackler family has released a statement saying “It is our hope the bankruptcy reorganization process that is now under way will end our ownership of Purdue and ensure its assets are dedicated for the public benefit.”
The Department of Justice deal will need to be approved by the court in order to push through.
Reactions to the deal
The settlement agreement between Purdue and the Justice Department will be evaluated by the judge overseeing the bankruptcy case to determine how it will affect negotiations with other states and cities that have filed lawsuits against Purdue.
Many of them have expressed objection to the terms of the deal, arguing that it lets the company and the Sackler family, off the hook too lightly for their roles in the crisis. The US opioid crisis has killed over 400,000 people since 1999.
Massachusetts attorney general Maura Healey tweeted: “DoJ failed. Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long.”
Meanwhile, at a press conference, New Jersey federal prosecutor Rachel Honig said: “This resolution does not provide anybody with a pass on the criminal side.”
According to Justice Department officials, the deal was “significant”, pointing out that the department would forego much of the $8 billion in fines, to allow the company to pay other creditors in the bankruptcy case, including the communities affected by opioid abuse that have filed a case against the company.