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Maker of OxyContin agrees to plead guilty and faces $8.3bn in penalties

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Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to criminal charges related to its marketing of the addictive painkiller, and faces penalties of roughly $8.3bn, The New York Times reports the US Justice Department announced. The settlement could pave the way for a resolution of thousands of lawsuits brought against the company for its role in a public health crisis that has killed more than 450,000 Americans since 1999.

The company’s owners, members of the wealthy Sackler family, have agreed to pay $225m in civil penalties. Prosecutors said the agreement did not preclude the filing of criminal charges against Purdue executives or individual Sacklers.

The federal settlement does not end all of the extensive litigation against Purdue, but it does represent a significant advance in the long legal march by states, tribes, cities and counties to hold the most prominent opioid maker accountable.

The NYT reports that OxyContin, which came on the market in the mid-90s, is seen as an early, ferocious driver of the opioid epidemic and Purdue is regarded as the architect of muscular, misleading drug marketing. But it is unlikely the company will pay anything close to the $8.3bn negotiated in the settlement deal. That is because Purdue sought bankruptcy court protection amid the onslaught of lawsuits, and so the federal government will now have to take its place in a long line of creditors. Typically, creditors end up collecting pennies on the dollar in bankruptcy proceedings.

The report says this federal case against Purdue is distinct from thousands of opioid-related lawsuits against other drug manufacturers, as well as distributors and pharmacy chains, still pending in federal and state courts.

Purdue has long demanded that the federal charges against it be resolved before it would agree to a larger settlement with cities, tribes, states and individuals, who claim that its relentless marketing of OxyContin directly contributed to a crisis of addiction and overdoses, resulting in towering costs in health care, law enforcement and unemployment.

Lawyers close to negotiations expect that the final settlement may emerge early next year.

 

Full report in The New York Times

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