Purdue Pharma to plead guilty, pay $8.3 billion over opioids
Court papers and US officials said, the company’s owners, members of the billionaire Sackler family, will pay $225 million in a civil settlement with the Department of Justice.Updated: Oct 21, 2020, 22:26 IST
Purdue Pharma LP will plead guilty to three felonies and pay $8.3 billion to settle federal probes of how it marketed OxyContin, the addictive painkiller blamed for helping to spark the opioid epidemic.
The company’s owners, members of the billionaire Sackler family, will pay $225 million in a civil settlement with the Department of Justice, court papers and US officials said. The agreement resolves the federal government’s criminal and civil investigations, according to a filing Wednesday in bankruptcy court in New York. Investigations by states including New York and Massachusetts will continue.
The settlement is likely to boost Purdue’s effort to move past claims it helped spark a public-health crisis over opioids with its marketing of OxyContin. Yet the company still faces thousands of civil claims by local and state officials, for which Purdue has proposed a separate $10 billion settlement. Governments are seeking reimbursement from Purdue and others for tax dollars spent coping with the crisis, which led to more than 200,000 US overdose deaths and chronic addiction.
To cope with a tidal wave of claims, Purdue last year filed for Chapter 11 protection in bankruptcy court in New York. US Bankruptcy Judge Robert Drain in White Plains, New York, must approve the settlement with the Department of Justice for it to become final.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” Purdue Pharma Chief Executive Officer Steve Miller said in a statement. “Resolving the DOJ investigations is an essential step in our bankruptcy process. The settlement agreement will pave the way for Purdue to submit a plan of reorganization to the bankruptcy court that will transfer all of Purdue’s assets to a public benefit company.”
In a bankruptcy filing earlier this year, federal prosecutors said they were seeking more than $11 billion in criminal fines and civil penalties from Purdue. The government claims the company fueled the opioid epidemic with illegal OxyContin marketing efforts.Previously in bankruptcy court, Purdue has proposed a $10 billion deal calling for Sackler family members to hand over the company to a trust controlled by the states, cities and counties that are suing it. As part of that proposal, members of the Sackler family would contribue $3 billion themselves.
Numerous state attorneys general, led by Massachusetts Attorney General Maura Healey and New York Attorney General Letitia James, oppose the Sackler’s bankruptcy offer. They want the family to dig into their own pockets for additional billions. Healy and James said in separate statements their litigation will continue.