Opioid Manufacturer Purdue Pleads Guilty to Felony Offences

Published: 26 November 2020

Purdue PharmaPurdue Pharma headquarters in Stamford, Connecticut. (Photo: John9474, Wikimedia, License)

By Eli Moskowitz

The now-bankrupt U.S. opioid manufacturer Purdue Pharma L.P. pleaded guilty on Tuesday to misleading the government about the sales of one of its drugs that played a role in the country’s opioid crisis. The confession ended the investigation that led to a multi-billion dollar settlement between the company and the Department of Justice (DOJ).

“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen. “Today’s guilty pleas to three felony charges send a strong message to the pharmaceutical industry that illegal behavior will have serious consequences.”  

The company sold its opioid product OxyContin to healthcare providers, even though it had reason to believe that it was being diverted to abusers.  

“The company lied to the Drug Enforcement Administration about steps it had taken to prevent such diversion, fraudulently increasing the amount of its products it was permitted to sell. Purdue also paid kickbacks to providers to encourage them to prescribe even more of its products,” Rachael A. Honig, First Assistant U.S. Attorney for the District of New Jersey explained.

According to the Centers for Disease Control and Prevention, drug overdose remains a leading cause of injury-related death in the U.S., with overdoses involving prescription and illicit opioids taking the lives of 128 people every day. 

After agreeing to settle with federal authorities last month for US$8.3 billion, it remains to be seen whether the company’s guilty pleas will meaningfully impact its wealthy owners, the Sackler family, who have thus far avoided jail time and have stashed much of their gains from the company offshore. 

As reported by OCCRP last month, the criminal and civil settlement reached by Purdue was opposed by numerous state attorneys general, who had been pursuing financial retribution from the company as well. 

Following the settlement, Letitia James, the attorney general of New York, released a statement asserting that the settlement “doesn’t account for the hundreds of thousands of deaths or millions of addictions caused by Purdue Pharma and the Sackler family.” 

“It allows billionaires to keep their billions without any accounting for how much they really made,” she said, alluding to the wealthy Sacklers, who, by filing their company for bankruptcy and allegedly taking out as much as $13 billion from the company through a secretive web of offshore trusts and companies, remained relatively unscathed from the federal government’s legal action. 

According to Josh Stein, the attorney general of North Carolina, the Sacklers “extracted nearly all the money out of Purdue and pushed the carcass of the company into bankruptcy.”

While Purdue Pharma stole headlines when it was announced that it had to shell out $8.3 billion, the company will have to transfer only a fraction of this sum to the federal government for the time being – a total of $225 million. The Sacklers will also pay $225 million to settle civil charges.  

Despite the criminal and civil settlements, the DOJ said that it will “not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ or other third parties’ ability to recover any fraudulent transfers.”