WASHINGTON — The Justice Department announced Wednesday it reached an $8.3 billion settlement with OxyContin-maker Purdue Pharma, as a result of criminal and civil investigations by federal prosecutors into the company’s marketing of opioid painkillers.
Purdue Pharma agreed to plead guilty in federal court in New Jersey to three felony counts for defrauding the United States and violating the anti-kickback statute from 2009 to 2017 in what the Justice Department said was “the largest penalties ever levied against a pharmaceutical manufacturer.” The $8.3 billion global settlement includes a criminal fine of $3.544 billion, criminal forfeiture of $2 billion and a civil settlement of $2.8 billion.
Federal prosecutors alleged the company, which manufactured millions of opioid pills during the height of the epidemic, paid two doctors through Purdue’s doctor speaker program and an electronic health records company to drive up prescriptions for its opioid products, including its top seller OxyContin.
“The kickback effectively put Purdue marketing department in the exam room with their thumb on the scale at precisely the moment doctors were making critical decisions about patient health,” District of Vermont U.S. Attorney Christina E. Nolan said at the Justice Department briefing.
Purdue acknowledged the wrongdoing the company was resolving, saying Wednesday that it is a “very different company” today.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” said Steve Miller, who has headed the company’s board since July 2018.
The criminal plea does not preclude the potential for criminal charges in the future against any executive or member of the Sackler family, who own Purdue Pharma.
In a statement, family members denied criminal culpability. They sought to distinguish between their ownership and leadership of the company and the individual criminal acts of managers.
“No member of the Sackler family was involved in that conduct or served in a management role at Purdue during that time period,” they said in a statement. But the family did strike a related $225 million civil settlement with the government as part of the deal, stemming from their drive, as directors of the company, to increase OxyContin sales.
The family members — including Richard Sackler, David Sackler, Mortimer D.A. Sackler, Kathe Sackler, and Jonathan Sackler (who is now deceased) — demanded in 2012 that company executives come up with a plan to generate greater revenue in response to slumping sales, according to the settlement.
They approved a new marketing plan called “Evolve to Excellence’’ in which “Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing ‘25 times as many OxyContin scripts’ as their peers,’’ the Justice Department said.
Those efforts directly led to uses of the addictive tablets that were “unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion,’’ the government said.
The $8 billion figure is largely symbolic — the bankrupt drugmaker is already indebted to states, communities and other creditors. The company is among several drugmakers and distributors embroiled in litigation over the deaths and economic devastation inflicted by the opioid epidemic. In the past two decades, more than 400,000 Americans, many in West Virginia, have died from opioid overdoses.
Critics of the Sacklers and Purdue blame OxyContin for fueling the epidemic and have argued for harsher penalties. The company and family still face scores of lawsuits. Attorneys general in the middle of litigation reacted harshly to the settlement news Wednesday.
“DOJ failed,” said Massachusetts Attorney General Maura Healey. “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.”
North Carolina Attorney General Josh Stein said he doesn’t support the settlement because it “does not force the Sacklers to take meaningful responsibility for their actions. A real agreement to resolve these cases would force the Sacklers to pay more and would provide funding to help pay for the treatment and programs people need to get well.”
“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,” New York Attorney General Letitia James wrote in a statement. “Instead, it allows billionaires to keep their billions without any accounting for how much they really made.”
With the federal government now in line with other creditors, it is unclear what money will remain for states, cities and towns to fund addiction recovery programs and supply overdose reversal medication, said Carl Tobias, a professor at the Richmond University School of Law.
“If the federal government actually does get any of these resources, is there anything left for the states?” Tobias asked.
Purdue Pharma filed for bankruptcy in September 2019, as it faced thousands of civil lawsuits brought by states, counties, and cities across the country, including in West Virginia.
The billionaire Sackler family is not part of the bankruptcy filing but has asked the court to be shielded from lawsuits as part of their agreement to a proposed bankruptcy settlement, which would include a family contribution of $3 billion.
States have contested the request for the family’s shield from lawsuits, contending it should pay more. A company-hired consultant has said Sackler family members paid themselves up to $13 billion from the company.
The modern version of the family- owned company, based in Stamford, Connecticut, got its start in 1952 when three brothers — Arthur, Raymond, and Mortimer — bought it. The Purdue Pharma affiliate was founded by two of the brothers, Raymond and Mortimer, in the early 1990s, and it introduced OxyContin in 1996.
The company aggressively marketed the drug and its timed-release properties to doctors for use in patients with chronic pain. But it was soon blamed for contributing to a spike in addictive narcotic oxycodone and was investigated by federal and state authorities for helping fuel a crisis of addiction to prescription drugs across the country.
In 2007, Purdue Frederick, an associated company, and three of its executives, none of them Sackler family members, pleaded guilty to deceptive marketing charges.