To end criminal and civil claims stemming from its marketing of Oxycontin (oxycodone hydrochloride), Purdue Pharma LP agreed Oct. 21 to pay more than $8 billion and to cease operating as a for-profit private company – provided the court presiding over its bankruptcy agrees.
As part of the criminal settlement reached with the U.S. Department of Justice (DoJ), Purdue will plead guilty to one count of conspiring to defraud the U.S. and to violate the Federal Food, Drug and Cosmetics Act and to two counts of conspiracy to violate the federal anti-kickback statute.
According to DoJ, the criminal settlement includes the largest penalties ever levied against a biopharma manufacturer – a fine of $3.544 billion, plus an additional $2 billion in forfeiture. In addition, Purdue will pay $2.8 billion in a civil settlement resolving False Claims Act violations. The civil settlement does not extend to individual company executives or employees.
A condition of the agreement is that Purdue, of Stamford, Conn., will emerge from bankruptcy as a public benefit company owned by a trust or similar entity designed for the benefit of the American people. The proceeds from the trust, which would continue to market prescription drugs, are to be directed toward state and local opioid abatement programs and would be credited up to $1.775 billion against the $2 billion forfeiture.
In a separate agreement, the Sackler family, which owns the private company, will pay $225 million to resolve civil False Claims Act allegations.
The agreements do not resolve civil claims that states may have against Purdue or members of the Sackler family, nor do they impede debtors’ ability to recover fraudulent transfers, the DoJ said. The resolution also does not include the criminal release of individuals, including members of the Sackler family.