Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to three federal criminal charges for its role in creating the nation’s opioid crisis and will pay more than $8 billion and close down the company. The privately held company has agreed to pay a $3.5 billion fine as well as forfeit an additional $2 billion in past profits, in addition to the $2.8 billion it agreed to pay in civil liability.
The company doesn’t have $8 billion in cash available to pay the fines. So Purdue will be dissolved as part of the settlement, and its assets will be used to create a new “public benefit company” controlled by a trust or similar entity designed for the benefit of the American public.
The Justice Department said it will function entirely in the public interest rather than to maximize profits. Its future earnings will go to paying the fines and penalties, which in turn will be used to combat the opioid crisis. That new company will continue to produce painkillers such as OxyContin, as well as drugs to deal with opioid overdose.
The plan is for the company to make life-saving overdose rescue drugs and medically assisted treatment medications available at steep discounts to communities dealing with the opioid crisis. Deputy Attorney General Jeffrey Rosen, who announced the settlement, defended the plans for the new company to continue to sell that drug, saying there are legitimate uses for painkillers such as OxyContin.
Abuse of prescription painkillers is a major cause of the nation’s opioid crisis. According to the Centers for Disease Control, 450,000 people died in the United States in the 10 years starting in 1999 from overdoses involving any opioid, including prescription and illicit opioids. And about a third of those deaths in 2018 involved prescription opioids.
Some states are objecting to the settlement. Twenty-five state attorneys general wrote to US Attorney General William Barr last week arguing that the government should not be in the business of selling OxyContin. “The public should be confident that public officials are seeking to avoid having special ties to an opioid company, conflicts of interest, or mixed motives in an industry that caused a national crisis,” said the letter. “Selling the business to a private owner may also deliver more upfront money that cities and states can use to abate the opioid epidemic.”
Adds Connecticut Attorney General William Tong, “Every dollar paid here is one dollar less for states like Connecticut trying to maximize money from Purdue and (its former owners) the Sackler (family) to abate the opioid epidemic. Preserving Purdue’s ability to continue selling opioids as a public benefit corporation is simply unacceptable. The timing of this agreement mere weeks before the election raises serious questions about whether DOJ political leadership was negotiating in the best interest of the American public.”