DOJ announces $8B-plus settlement with OxyContin maker
OxyContin maker Purdue Pharma has agreed to a settlement worth more than $8 billion to resolve a federal probe of its marketing practices for opioids, the Justice Department announced Wednesday.
The company, which has been blamed more than any other for fueling the nation's opioid epidemic, will also plead guilty to three charges connected its role in the drug crisis. Purdue's owners, the Sackler family, will also pay $225 million in a civil settlement.
Key context: Wednesday's announcement will allow President Donald Trump to claim progress in tackling the drug epidemic less than two weeks before Election Day. Four years ago, he campaigned heavily on ending a crisis that's killed over 450,000 Americans in the past two decades, but the issue largely been overlooked in the 2020 election even as drug overdose deaths hit historic levels.
Preliminary CDC data show that drug overdose deaths, after a brief dip in 2018, hit a record high in 2019, with nearly 72,000 fatalities. The toll continues to climb this year amid the coronavirus pandemic. Opioids, which account for most drug deaths, were involved in two out of every three drug overdose fatalities in 2018, according to the CDC.
Controversy over the agreement: The resolution with the Trump administration also includes a mandate to dissolve Purdue, with the Sacklers relinquishing all ownership and control. The company's assets, pending the approval of a bankruptcy court, will be redirected to a government-owned "public benefit company" that will still produce OxyContin and opioid addiction treatment.
Last week, 25 state attorneys general wrote a letter urging the Justice Department against making such a move, saying the government shouldn't benefit from sales of OxyContin, the 25-year-old drug that helped power the addiction crisis. Deputy Attorney General Jeffrey Rosen defended the plan against those criticisms.
“It was also our judgment on this that while prescription opioids can be abused, diverted, misused in very harmful ways, it’s a prescription pharmaceutical that does have some positive uses, and maintaining supply of those is itself something that could be beneficial,” Rosen told reporters Wednesday.
Rosen declined to say why DOJ didn’t pursue criminal charges against the Sacklers, noting only that the civil resolution doesn’t absolve them from other legal claims.
Purdue will plead guilty to conspiracy to defraud the government and kickback schemes involving payments to prescribing doctors and an electronic health records company.
What's next: A separate sprawling mass litigation effort to hold Purdue and other drug companies accountable for the opioid crisis continues to drag on. That yearslong legal battle involves thousands of U.S. counties, cities and towns that have sued drugmakers, pharmacies and drug distributors. A coalition of state attorneys general is pressing for a proposed $48 billion global settlement as quickly as possible, while other attorneys general and lawyers for the municipalities want to hold out for more.
Purdue last year filed Chapter 11 bankruptcy protection last year to freeze lawsuits while figuring out a separate settlement with them.
The drug firm Mallinckrodt earlier this month filed for bankruptcy protection and set aside $1.6 billion to resolve all its pending opioid-related legal claims.
Brianna Ehley contributed to this report.
