WASHINGTON -- Drugmaker Purdue Pharma, the company behind the powerful prescription painkiller OxyContin that experts say helped touch off an opioid epidemic, will plead guilty to federal criminal charges as part of a settlement of more than $8 billion, the Justice Department announced Wednesday.
The deal does not release any of the company's executives or owners -- members of the wealthy Sackler family -- from criminal liability, and a criminal investigation is ongoing. Family members said they acted "ethically and lawfully," but some state attorneys general said the agreement fails to hold the Sacklers accountable.
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The drugmaker also will admit to conspiring to violate federal kickback statutes by paying sham speaker fees to doctors who ramped up OxyContin prescriptions, the government said.
Also, Purdue will acknowledge illegally making payments to Practice Fusion, an electronic health-records company, in exchange for using the firm's software to sway doctors into prescribing larger amounts of the opioid-based painkiller and other Purdue drugs, the government said. According to media reports earlier this year, those payments amounted to $1 million.
The Sacklers will lose all control over their company, a move already in the works, and Purdue will become a public benefit company, meaning it will be governed by a trust that has to balance the trust's interests against those of the American public and public health, officials said.
In a statement, family members denied criminal and civil culpability. They sought to distinguish between their ownership and leadership of the company, and the individual criminal acts of lower level 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. They expressed "deep compassion for people who suffer from opioid addiction and abuse, and hope the proposal will be implemented as swiftly as possible to help address their critical needs."
The settlement is the highest-profile display yet of the federal government seeking to hold a major drugmaker responsible for an opioid addiction and overdose crisis linked to more than 470,000 deaths in the country since 2000.
It comes less than two weeks before a presidential election where the opioid epidemic has taken a political back seat to the coronavirus pandemic and other issues, and gives President Donald Trump's administration an example of action on the addiction crisis, which he promised early on in his term.
Ed Bisch, who lost his 18-year-old son to an overdose nearly 20 years ago, said he wants to see people associated with Purdue prosecuted and was glad the Sackler family wasn't granted immunity.
He blames the company and Sacklers for thousands for deaths. "If it was sold for severe pain only from the beginning, none of this would have happened," said Bisch, who now lives in Westampton, N.J. "But they got greedy."
Brooke Feldman, a 39-year-old Philadelphia resident who is in recovery from opioid addiction and is a social worker, said she is glad to see Purdue admit wrongdoing. She said the company had acted for years as "a drug cartel."
Democratic attorneys general criticized the agreement as a "mere mirage" of justice for victims.
"The federal government had the power here to put the Sacklers in jail, and they didn't," Connecticut Attorney General William Tong said in a statement. "Instead, they took fines and penalties that Purdue likely will never fully pay."
"Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts," Steve Miller, who became chairman of the Purdue board in 2018, said in a statement. No members of the Sackler family remain on that board, though they still own the company.
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MISLED DRUG AGENCY
As part of the resolution, Purdue is admitting that it impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company's manufacturing quotas, the officials said.
Purdue will make a direct payment to the government of $225 million, which is part of a larger $2 billion criminal forfeiture. The $225 million settlement resolves allegations that board members -- including Richard Sackler, David Sackler, Mortimer Sackler and other family members -- urged Purdue executives to find a way to pump up OxyContin sales in 2012 when the market for opioids had contracted, the Department of Justice said.
Under a plan that the family members approved, titled "Evolve to Excellence," Purdue sales representatives stepped up their OxyContin marketing to high-volume prescribers, which resulted in the addictive pills being used in ways that were "unsafe, ineffective and medically unnecessary," the government said.
In addition to that forfeiture, Purdue also faces a $3.54 billion criminal fine, though that money probably will not be fully collected because it will be taken through a bankruptcy, which includes a large number of other creditors, including thousands of state and local governments. Purdue will also agree to $2.8 billion in damages to resolve its civil liability.
"The kickback effectively put Purdue's 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 Nolan said at the Justice Department briefing.
AID FOR TREATMENT
Part of the money from the settlement would go to aid in medication-assisted treatment and other drug programs to combat the opioid epidemic. That part of the arrangement echoes the plan the company is pushing in bankruptcy court and which about half of the states oppose.
As part of the plea deal, the company admits that it violated federal law and "knowingly and intentionally conspired and agreed with others to aid and abet" the dispensing of medication from doctors "without a legitimate medical purpose and outside the usual course of professional practice," according to the plea agreement.
While some state attorneys general opposed the prospect of Purdue becoming a public benefit company, the lead lawyers representing 2,800 local governments in lawsuits against Purdue and other drugmakers, distributors and pharmacies put out a statement supporting the principle but saying more work needs to be done.
The Sackler family has already pledged to hand over the company itself plus at least $3 billion to resolve thousands of lawsuits against the Stamford, Conn.-based drugmaker. The company declared bankruptcy as a way to work out that plan, which could be worth $10 billion to $12 billion over time. In their statement, family members said that is "more than double all Purdue profits the Sackler family retained since the introduction of OxyContin."
"Both the company and the shareholders are paying a very steep price for what occurred here," Deputy U.S. Attorney General Jeffrey Rosen said Wednesday.
While there are conflicting views of whether it's enough, it's clear the Sacklers' reputation has taken a hit.
Until recently, the Sackler name was on museum galleries and educational programs around the world because of gifts from family members. But under pressure from activists, institutions from the Louvre in Paris to Tufts University in Massachusetts have dissociated themselves from the family in the past few years.
Information for this article was contributed by Michael Balsamo and Geoff Mulvihill of The Associated Press; by Jef Feeley and Chris Strohm of Bloomberg News; and by Meryl Kornfield, Christopher Rowland, Lenny Bernstein and Devlin Barrett of The Washington Post.
