Memo revealed during bankruptcy proceedings suggests Purdue’s charges should have been much worse years ago.
A new Department of Justice (DOJ) internal memo, titled Proposed Indictment of Purdue Pharma LP, shows federal prosecutors found evidence that Purdue executives may have committed a plethora of crimes in order to accelerate OxyContin sales. The six-page memo, dated October 6, 2006, is part of a current filing with states asking for $2.2tn for the company’s alleged role in the opioid epidemic. It was disclosed during the drug maker’s bankruptcy proceedings, which reference more than 200,000 deaths in the U.S. alone due to prescription opioid use between 1999 and 2016. According to the National Bureau of Economic Research, OxyContin accounted for 65% of the national growth in overdose fatalities since 1996.
The document details a $654m settlement between Purdue Frederick – a company that was affiliated with Purdue Pharma in 2007 – and the government over deceptive marketing claims. If the government had accepted prosecutors’ recommendations at the time and brought a criminal claim against Purdue, experts believe it may have been out of business entirely.
The memo recommends indicting the company for mail fraud, wire fraud, money laundering and conspiracy and charging the Purdue executives Michael Friedman, Paul Goldenheim and Howard Udell with felonies. Yet, the government agreed to limit Purdue’s exposure to six years, beginning when OxyContin was first introduced in the market with first-year sales of $48m, to 2001, when sales had already reached $1.1bn.
“The indictment charges a multi-object conspiracy with the overall goal of maximizing the revenues from the sale of OxyContin through fraud, deceit, and false statement, “wrote Kirk Ogrosky, deputy chief of the fraud section at DOJ in Washington. Ogrosky wrote that “Purdue’s crimes began in 1992 and were still continuing at the time of the memo in 2006” and “Friedman, Goldenheim and Udell had lied to Congress.”
When the DOJ announced its deal in May of that year, it looked very different from Ogrosky’s recommendations Purdue and three executives pleaded guilty simply to misleading the public.
It wasn’t until Senators Sheldon Whitehouse and Maggie Hassan requested the DOJ turn over the memo in 2019 that the resolution was directly called into question. They stated it is “purported to include evidence that Purdue Pharma executives may have lied when they told Congress that they had no knowledge of the extensive abuse and diversion of OxyContin before it was made known to them in 2000.” Hassan added, “If the Department of Justice had acted decisively in 2006 against Purdue Pharma, it could have helped prevent untold harm that the company has caused in the years since – instead, top political appointees at the Department of Justice reportedly intervened.”
Michael Quinn, an attorney for the Ad Hoc Committee on Accountability in the current Purdue Pharma bankruptcy case, said, “We are calling on the government to prevent Purdue and the Sacklers from buying their way out of criminal prosecution and to not repeat the shortcomings of the 2007 settlement.” By releasing protective documents such as this internal memo, the plaintiffs are hoping to hold the parties accountable to the fullest extent of the law.