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Opioid Drugs

Purdue Pharma Draws Closer to Reaching a Settlement Agreement

— October 21, 2020

Purdue and members of the Sackler family consider plea deal in OxyContin litigation.

Purdue Pharma, the drug maker responsible for manufacturing the addictive prescription painkiller OxyContin, as well as members of the Sackler family, are closing in on an agreement to plead guilty to criminal charges.  The settlement constitutes part of a larger deal to resolve U.S. Department of Justice (DOJ) probes into the company’s alleged role in contributing to the crippling opioid crisis.

Purdue’s attorneys and federal prosecutors are working together to develop a plea deal expected to be disclosed by the end of the month.  Insiders indicate it will include billions of dollars of financial penalties while cautioning that the discussions are ever evolving and some of the terms could change.  The deal would shield Purdue from further criminal charges related to the detrimental effects of OxyContin.

In addition to the criminal case, U.S. prosecutors are negotiating a settlement for individual civil claims against Purdue which will include an additional financial penalty.  All in all, the drug manufacturer is expected to face fines exceeding $8 billion, including a $3.5 billion criminal fine, $2 billion criminal forfeiture and $2.8 billion civil penalty.  The fines are expected to be paid within Purdue’s bankruptcy filing, which means the company will lack the funds to repay all of its creditors.

Purdue Pharma Draws Closer to Reaching a Settlement Agreement
Photo by Christa DoDoo on Unsplash

Purdue said it is cooperating with the DOJ probes and discussion talks, and the federal agency is preparing to waive a large portion of its $2 billion forfeiture so long as Purdue meets negotiated conditions, including contributing funds to help remediate the epidemic and receiving court approval for a reorganization plan which would effectively reinvent the company as a “public benefit enterprise” run on behalf of those communities.  Members of the Sackler family behind Purdue will, subsequently, relinquish control.

The charges Purdue is preparing to plead guilty to include conspiracy, violations of an anti-kickback law and misbranding under the Food, Drug and Cosmetic Act.  An agreement would require approval of Purdue’s bankruptcy judge.  Members of the Sackler family also facing lawsuits would be able to avoid criminal charges, but the settlement will not resolve any future criminal liability the members of the family may face.

Details of the agreement hinge in part on the outcome of separate negotiations among Purdue, the Sacklers, state attorneys general and others to resolve widespread litigation.  Forbes values the Sackler family collectively as being worth around $13 billion which it indicated was a conservative estimate.  Thus, the parties suing Purdue are likely to believe the settlement is too low and allows members of the family to get away too easily.  Some state attorneys general, including those in Massachusetts and New York, have demanded Purdue’s Sackler family to disclose details of their financial worth before finalizing negotiations.

The fact that the Sacklers operating Purdue Pharma have not filed for personal bankruptcy has also drawn sharp criticism from the cities and states hoping to hold them financially liable for their part in fueling the crisis.  All of these factors will be considered in the settlement talks and could contribute to a change in terms over time.


Purdue Pharma nears guilty plea agreement over alleged role in opioids crisis

Purdue close to plea agreement in federal OxyContin investigation: report

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