Purdue Pharma LP agreed to plead guilty to criminal charges over the handling of its addictive prescription opioid OxyContin, in a deal with U.S. prosecutors that effectively sidestepped paying billions of dollars in penalties and stopped short of criminally charging its executives or wealthy Sackler family owners.
In a far-reaching agreement unveiled on Wednesday, Purdue formally admitted to criminal conduct related to distribution of its painkillers and agreed to pay $225 million to resolve U.S. Justice Department investigations.
Prosecutors imposed significant penalties exceeding $8 billion against Purdue, though the lion’s share will go largely unpaid.
Purdue agreed to pay $225 million toward a $2 billion criminal forfeiture, with the Justice Department foregoing the rest if the company completes a bankruptcy reorganization dissolving itself and shifting assets to a “public benefit company,” or similar entity, that steers the $1.775 billion unpaid portion to thousands of U.S. communities suing it over the opioid crisis.
A $3.54 billion criminal fine and $2.8 billion civil penalty are likely to receive cents on the dollar as they compete with trillions of dollars of other claims from those communities and other creditors in Purdue’s bankruptcy proceedings, according to court documents and people familiar with the matter.
Members of the billionaire Sackler family who own Purdue agreed to pay a separate $225 million civil penalty for allegedly causing false claims for OxyContin to be made to government healthcare programs such as Medicare, according to court records. The Sacklers, which have proposed ceding control of Purdue to settle widespread opioid litigation, denied allegations prosecutors lodged in the civil case.
Neither the Sacklers nor any Purdue executives were criminally charged. The agreement does not release any individuals associated with Purdue from potential criminal liability. A separate Justice Department criminal investigation scrutinizing individuals is ongoing, according to people familiar with the matter.
Purdue conspired to engage in criminal conduct over the years that kept medically questionable prescriptions of its opioids flowing, prosecutors said. The Stamford, Connecticut-based company has agreed to plead guilty to three felonies, two of them violations of a federal anti-kickback law and another charge of defrauding the U.S. and violating the Food, Drug and Cosmetic Act.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice,” said Purdue Chairman Steve Miller, who joined the company in July 2018. He noted that Sacklers no longer sit on the company’s board.