Purdue Pharma Sentenced to $5.5 Billion for OxyContin Crisis
Synopsis
OxyContin maker Purdue Pharma has been sentenced to $5.5 billion in fines in a New Jersey federal court, clearing the way for a $7.4 billion bankruptcy settlement. The company admitted to paying the doctors and deceiving regulators to boost opioid sales. Most of the $5.5 billion will go unpaid, the US Department of Justice will collect just $225 million. Purdue dissolves on May 1 and re-emerges as a non-profit making addiction treatment medicines. Over 40 victims spoke in court, with many saying fines alone are not justice for the lives destroyed by OxyContin.
OxyContin maker Purdue Pharma is fined $5.5bn for pleading guilty to deceiving regulators and taking payments from doctors to promote the sale of opioids. Now, the company is to be liquidated, and a $7.4 billion settlement is in order but many victims say that hardly constitutes punishment for the suffering they endured.
Key Highlights
- A New Jersey federal court sentenced Purdue Pharma to $5.5 billion in fines and penalties.
- The company is going through a $7.4 billion bankruptcy settlement, including an $865 million fund for people affected by the opioid crisis.
- Only $225 million has been collected in cash by the US Department of Justice.
- More than 200 victims submitted letters to the court and more than 40 addressed it in person, many saying fines are no punishment at all.
The Court’s Decision, And Its Implications
Purdue Pharma was ordered to pay $5.2 billion in fines and penalties in federal court in Newark for deceiving government regulators and paying doctors who prescribed OxyContin. The company was sentenced following its 2020 guilty plea. The sentencing is the last significant legal obstacle to Purdue’s bankruptcy settlement.
The company acknowledged in exchange documents paying doctors who promoted OxyContin, and misleading federal regulators about its efforts to prevent unlawful usage of the prescribed drug. It had also confessed to a 2007 separate guilty plea that the drug they prescribed was less useful and addictive than competing prescription drugs.
Money, Most Is Never Going to Be Collected
That $5.5 billion sentence is huge in the big-money world of antitrust. The reality is far smaller. A large portion of that figure has gone unpaid under this plea deal. The actual cash collection by the US Department of Justice will be only $225 million as long as Purdue uses the balance of its assets to pay back creditors, most importantly, those state and local governments that have suffered from thousands of overdose deaths by paying for the damage done in their communities due to the opioid crisis.
The wider $7.4 billion settlement includes an $865 million fund for victims of the crisis, but many claimants say it has become nearly impossible to even access that funding, with claimants forced to provide prior prescription records that some people do not still have.
The plea was accepted after nearly seven hours of testimony from victims, with U.S. District Judge Madeline Cox Arleo overseeing the process. Over 200 letters were submitted, with over 40 speaking publicly in court. Most were blunt, a fine is not a punishment. Judge Arleo stated that no one could be jailed because, while the company was charged, the Department of Justice hadn’t charged individuals.
Next Steps, Purdue dissolves and reforms as a not-for-profit
Purdue Pharma intends to come out of the bankruptcy on 1st May, thereby effectively no longer being Purdue Pharma in its current iteration. The company will now rise again as an entirely non-profit firm, dedicated to producing opioid addiction treatment and reversal medicines, in stark contrast to the self-serving kind of company that spent decades promoting the drugs that addictively pushed patients into drug addiction in the first place. Purdue’s bankruptcy case is more than six years old and has reached all the way to the U.S. Supreme Court on multiple appeals.
FAQs
- What is the cash portion of Purdue actually going to pay?
As long as Purdue uses its remaining assets to pay creditors through bankruptcy, only $225 million, a drop in the bucket of the total sentence, 5.5 billion dollars, will go unpaid.
- Sackler Family Members to Face Criminal Charges?
Not from this case. The DOJ proceeded against only the company, not individuals. As a result, Judge Arleo said she lacked the authority to imprison executives or owners.
- Who will actually receive the $7.4 billion settlement money?
Mostly state and local governments. An $865-million piece is earmarked for those affected by the opioid crisis, but victims easily face barriers to qualifying, as the paperwork can be difficult.
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