STAMFORD, CT – APRIL 2: Signage for Purdue Pharma headquarters stands in downtown Stamford, April 2, 2019 in Stamford, Connecticut. Purdue Pharma, the maker of OxyContin, and its owners, the Sackler family, are facing hundreds of lawsuits across the country for the company’s alleged role in the opioid epidemic that has killed more than 200,000 Americans over the past 20 years. (Photo by Drew Angerer/Getty Images)
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OxyContin makerPurduePharmawassentenced on Tuesday to $5.5billionin fines and penalties stemming from its 2020 guilty plea to charges of deceiving government regulators and paying kickbacks to doctors to boostopioidsales.
The sentencing in New Jersey federal court clears thewayfor the company to dissolve in bankruptcy and use its assets to fund a$7.4billionsettlementintended to compensate people harmed by theopioidepidemic.
Before accepting theplea deal, U.S. District Judge Madeline Cox Arleo in Newark heard nearly seven hours of testimony from people who wanted to speak up about the company’s role in fueling theopioidepidemic in the United States. Over 200 victims sent letters to the court with personal stories of addiction and loss, and more than 40 spoke up in the courtroom.
Arleo directedPurdueChairman Steve Miller to apologize directly to victims in the courthouse, which he did, saying the company “deeply regrets and accepts responsibility” for past misconduct.
“We are deeply apologetic for all of the things that happened that were described in colorful detail by all the victims here today,” Miller said.
Arleo then offered an apology of her own. She said the government failed at several opportunities to stopPurduefrom deceiving doctors and patients about the addictiveness of OxyContin.
“Your government failed you,” Arleo said to the victims. “The inadequacy of what the law can offer today must be plainly stated.”
Several of those who spoke said a fine was not sufficient punishment forPurdue’s crimes. They called forPurdue’s owners, members of the wealthy Sackler family, or executives to face jail time and for Arleo to reject the plea deal.
“Punishment by a fine means ‘legal for a price’,” said Ed Bisch, who lost his son Eddie to an overdose in 2001.
Limits of punishment
Arleo said she could not jailPurdueexecutives or company owners because the U.S. Department of Justice had not brought charges against them, only the company.
The judge said accepting the plea deal was the best outcome she could achieve, and that she hoped future cases would be handled differently, so that corporate wrongdoers do not get the message that they can “pay fines as the cost of doing business.”
Under the plea deal, most of the $5.5billionin fines will go unpaid, with the Justice Department collecting just $225 million as long asPurduedirects its remaining assets to repaying its creditors. Those are mostly state and local governments that were left to deal with the cost and consequences of theopioidcrisis in their communities.
The sentencing comes as people harmed byopioids say the company’s long-running bankruptcy has left them frustrated. The $7.4billionsettlement, which includes an $865 million fund for individuals affected by the crisis, had been hailed byPurdueand plaintiffs’ lawyers as a victory for victims. A recentReuters examination showshow the process has created daunting hurdles for many people seeking compensation.
Many victims who spoke on Tuesday expressed frustration with a bankruptcysettlementthat could shut out many people who have been unable to find the old prescription records needed to qualify for payment.
Arleo toldPurdue’s lawyers that they should work with claimants who are having trouble locating old prescription records, rather than simply rejecting them.
“I want there to be some flexibility for victims,” Arleo said. “We don’t just say ‘no’ because the records aren’t there.”
Alexis Pleus, who lost her son Jeff to an overdose after he was first prescribed OxyContin for a football injury, said she had heard from countless families with stories like hers, and the majority likely won’t qualify for payment.
“We still deserve justice, and this isn’t it,” Pleus said in court.
Coming to a close
Purdue’s bankruptcy case is coming to a close after more than six years in court, following a lengthy series of appeals that went all thewayto theU.S. Supreme Court.
The sentencing was one of the final hurdles before the bankruptcysettlementcan proceed.
Purduesaid it remains on track to emerge from bankruptcy on May 1, ceasing its previous operations and emerging as a new nonprofit company that will makeopioidaddiction treatment and overdose-reversal medicines.
As part of the plea agreement,Purdueadmitted to paying kickbacks to doctors to fuel OxyContin sales and to deceiving federal regulators about its efforts to prevent illegal drug use.
The company previously pleaded guilty to misbranding and fraud charges related to its marketing of OxyContinin 2007, admitting it falsely marketed OxyContin as less addictive, less subject to abuse, and less likely to cause withdrawal symptoms than rival pain medications.
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