A New Jersey court sentenced OxyContin maker Purdue Pharma to $5.5bn in fines and penalties stemming from its 2020 guilty plea to charges of deceiving government regulators and paying kickbacks to doctors to boost opioid sales, reports CNBC.
US District Judge Madeline Cox Arleo’s sentencing on Tuesday came after nearly seven hours of testimony from people speaking up about the company’s role in fuelling the opioid epidemic, and clears the way for it to dissolve in bankruptcy and use its assets to fund a $7.4bn settlement intended to compensate them.
More than 200 victims sent letters to the court with personal stories of addiction and loss, and more than 40 spoke up in the courtroom.
Arleo directed Purdue chairman Steve Miller to apologise directly to victims in the courthouse, which he did, saying the company “deeply regrets and accepts responsibility” for past misconduct.
Arleo also apologised, saying the government had failed at several opportunities to stop Purdue from deceiving doctors and patients about the addictiveness of OxyContin.
Several of those who spoke called for Purdue’s owners, members of the wealthy Sackler family, or executives, to face jail time and for Arleo to reject the plea deal.
Limits of punishment
However, Arleo said she could not jail them because the Department of Justice had not brought charges against them, only the company.
Under the plea deal, most of the $5.5bn in fines will go unpaid, with the Justice Department collecting just $225m as long as Purdue directs its remaining assets to repaying its creditors – mostly state and local governments that were left to deal with the cost and consequences of the opioid crisis in their communities.
The $7.4bn settlement, which includes an $865m fund for individuals affected by the crisis, had been hailed by Purdue and plaintiffs’ lawyers as a victory for victims.
But many victims expressed frustration with a bankruptcy settlement that could shut out many people who have been unable to find the old prescription records needed to qualify for payment.
Arleo told Purdue’s lawyers that they should work with claimants who are having trouble locating old prescription records, rather than simply rejecting them.
“I want there to be some flexibility,” Arleo said. “We don’t just say ‘no’ because the records aren’t there.”
Coming to a close
Purdue’s bankruptcy case is coming to a close after more than six years in court, and a lengthy series of appeals that went all the way to the US Supreme Court.
The sentencing was one of the final hurdles before the bankruptcy settlement can proceed.
Purdue will emerge as a new non-profit company that will make opioid addiction treatment and overdose-reversal medicines.
As part of the plea agreement, it admitted to paying kickbacks to doctors to fuel OxyContin sales and to deceiving federal regulators about its efforts to prevent illegal drug use.
The company previously pleaded guilty to misbranding and fraud charges related to its marketing of OxyContin in 2007, admitting it falsely marketed OxyContin as less addictive, less subject to abuse, and less likely to cause withdrawal symptoms than rival pain medications.
AP reports that to allow victims to attend the court proceedings in person, Arleo had delayed the criminal sentencing last Tuesday, which was originally meant to be conducted only by video-conferencing.
She had changed her mind after seeing some victims of the opioid crisis protesting outside her courthouse, saying they should be allowed to attend in person, too, and moving the hearing to this week.
Sentencing rears in the making
The company had admitted it did not have an effective programme to keep its powerful prescription painkillers from being diverted to the black market, even though it told the Drug Enforcement Administration that it did.
It also admitted that it paid doctors through a speakers’ programme to prescribe the drugs and paid an electronic medical records company to send doctors information on patients that encouraged more opioid prescriptions.
Although Purdue produced only a fraction of the opioid pills that flooded the market in the 2000s, advocates have long seen aggressive sales of OxyContin as one of the touchstones of the crisis. At a 1996 event to rally Purdue’s sales force, Richard Sackler, then a top Purdue executive and later president of the company, called for a “blizzard of prescriptions”.
Under the Purdue deal, members of the Sackler family will be shielded from lawsuits over opioids from those who agree to the payments.
Purdue is to be replaced by a new company, Knoa Pharma, to operate for the public benefit and have a board appointed by the states.
The reorganisation is considered one of the most complicated ever. By the end of last year, Purdue had paid law firms and other professionals working on all sides of the case more than $1bn, according to a court filing.
None of the Sackler family was ever charged. Family members received $10.7bn in payments from Purdue from 2008 to 2018, with nearly half of it used to pay taxes on behalf of Purdue. They have not been paid by the company since 2018: the last of the them left Purdue’s board in 2019.
See more from MedicalBrief archives:
Judge green-lights opioid settlement with Purdue, Sackler family
Pause in opioid litigation against Purdue Pharma and Sacklers
Purdue boss: Family wants protection from OxyContin litigation