Louisville, KY – Purdue Pharma, the company that manufactures OxyContin, is in the news. Again.
On October 21, the Sackler family (company owners) agreed to pay $225 million to resolve their liability under the False Claims Act (FCA). On November 24, their company pled guilty to three felonies – two counts of conspiracy to violate the Federal Anti-Kickback Statute and one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act. The admissions of wrongdoing in court included:
- The company “had not maintained an effective program to prevent prescription drugs from being diverted to the black market, even though it had told the DEA it did have such a program, and that it provided misleading information to the agency as a way to boost company manufacturing quotas” ;
- The company paid “doctors through a speakers program to induce them to write more prescriptions for its painkillers” ;
- The company paid “an electronic medical records company to send doctors information on patients that encouraged them to prescribe opioids.”
As part of the terms of the plea bargain, the U.S. Department of Justice (DOJ) has imposed the largest penalties ever levied against a pharmaceutical manufacturer:
- a criminal fine of $3.544 billion
- an additional $2 billion in criminal forfeiture, $225 million of which must be paid within three business days following entry of judgment.
The DOJ is allowing payments that the company makes to local and state governments to be credited toward the amounts owed under the federal penalties if certain conditions are met. Additionally, the company has agreed to allow the U.S. government an unsecured bankruptcy claim for $2.8 billion to resolve the company’s civil liability under the FCA.
This follows the company’s $270 million settlement in March 2019 with the state of Oklahoma. The company paid $10 million to the state of West Virginia in 2004 (another $84 million was paid by various wholesale distributors in 2017 and 2019). The company, its president, top lawyer and chief medical officer paid $634.5 million in fines to the federal government in 2007 “for claiming the drug was less addictive and less subject to abuse than other pain medications.” Also in 2007, the company paid $19.5 million to 26 states and the District of Columbia for encouraging physicians to over-prescribe OxyContin. So Purdue Pharma is no stranger to paying for their wrongdoing.
The company is likely to be reorganized into a public benefit corporation, with profits from future opioid sales expected to fund programs aimed at alleviating the addiction crisis. That would remove the Sackler family from being involved in the company.
With respect to the individual liability of members of the Sackler family:
- Federal criminal liability – Still available. There is no agreement between the DOJ and individual members of the family.
- Federal civil liability – Still available with the exception of claims under the FCA (the company paid $225 million to settle those claims without admitting liability).
- State criminal liability – Not affected.
- State civil liability – Not affected.
According to the Associated Press, many activists and state attorneys general are not satisfied with this agreement because “the family remains wealthy and its members will not face prison or other individual penalties.”
But it isn’t just Purdue Pharma that is being held accountable:
- In addition to the Purdue Pharma settlement, the state of Oklahoma also reached an $85 million settlement agreement in June 2019 with Teva Pharmaceutical Industries while Johnson & Johnson (who opted out of the group) was ordered to pay $572 million in August 2019.
- $26 billion is the most recent offer (as of November 9, 2020) from McKesson, Cardinal Health and AmerisourceBergen to “settle lawsuits with states and small governments.”
- Lawsuits by Ohio counties Lake and Trumbull “allege CVS, Walgreens, Rite Aid, Walmart and Giant Eagle helped fuel a national drug crisis that resulted in more than 430,000 deaths since 2000.”
- Barry Schultz (serving 157 years in prison) prescribed one patient over 23,000 of the highest potency oxycodone pills in an eight-month period. Hsiu-Ying “Lisa” Tseng was convicted in 2016 for the murder of three patients because of their overdoses from pills she prescribed.
That means accountability has come to manufacturers, wholesale distributors, retail pharmacies and prescribers. Is that enough? To people that have lost loved ones (nearly 15,000 people in 2018 alone, a 13.5 percent decrease from 2017), there is no retribution that will bring back their mother, son, friend, pastor, attorney, doctor, sports coach, community leader. But as the U.S. continues to clean up the mess of the opioid epidemic that started with the over-prescribing of opioids like OxyContin, it’s a start.