Purdue Pharma, the maker of the powerful painkiller Oxycontin, is set to plead guilty to three federal charges as part of an $8 billion settlement. Oxycontin is said to bear some of the responsibility for the growing opioid epidemic in the U.S.
The New York Times reported that the settlement represents “a move that could pave the way for a settlement of thousands of lawsuits brought against the company for its role in the opioids epidemic.”
What is Purdue Pharma worth?
The company is best known for manufacturing the painkiller Oxycontin, which many individuals and organizations blame for the crisis of opioid addiction over the past twenty or so years.
Purdue Pharma had moderate success until Oxycontin, a narcotic pain reliever, launched in 1995. By 2003, the company was seeing $1.6 billion annual sales of that drug alone.. It is still reported to be generating $3 billion in annual sales.
2007 was the last time the company pleaded guilty to federal criminal charges for misleading the public about Oxycontin, reported the New York Times.
To resolve many local lawsuits against the company, Purdue Pharma “has proposed a global settlement that it values at about $10 billion.” That would include $3 billion contributed by the Sacklers as well as future profits of drugs currently under development.
Sackler family wealth may remain largely untouched for now
Sackler family members, many of whom are owners or executives of Purdue Pharma, are not specifically implicated in this settlement. However, they are not released from potential litigation in the future, reported NBC News.
None of these family members remain on the company board, though recent estimates put the family’s total net worth at about $13 billion. The family has agreed to pay $225 million for civil fines.
Oxycontin painkiller the subject of multiple lawsuits
The federal government has been seeking to hold a major drugmaker responsible for many of the opioid-related deaths in the country. Over 470,000 deaths have occurred due to opioid addictions or overdoses in the U.S. since 2000.
The settlement includes Purdue Pharma’s admission of defrauding federal health agencies and violation of federal anti-kickback laws. The company paid physicians in exchange for their writing more prescriptions for Purdue’s opioids and used electronic health records software to influence pain medication prescriptions, said Justice Department officials.
A direct payment of $225 million to the government, part of a $2 billion criminal forfeiture, is part of Purdue Pharma’s required payment. The company also will agree to $2.8 billion in damages as part of its civil liability, reported CNBC.
Massachusetts Attorney General Maura Healey called the Department of Justice’s settlement a failure because it was too lenient. She asserted, “Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election.”
Purdue Pharma filed for bankruptcy last year.
Also involved in the lawsuit resolution is a $3.54 billion criminal fine against Purdue Pharma. However, much of the settlement money will be tied up in bankruptcy court or go to settle debts with other creditors.
Purdue Pharma filed for bankruptcy in 2019. It now proposes that the company be run as a “public benefit corporation”, NYT reported. This would mean that proceeds from sales of Oxycontin and new medications to reverse overdoses would go toward helping to prevent and treat opioid addiction.