$8.3 billion in opioid fines but no criminal charges for execs and family owners

buildingpurdue-300x200Christmas arrived before Halloween for a notorious Big Pharma firm. Federal prosecutors effectively gave its family founders and its executives gilded skates, so they can slide away for now from major criminal charges and severe financial penalties for their part in fostering the opioid abuse and drug overdose crisis that has killed hundreds of thousands of Americans and cost the nation more than $1 trillion.

The devil is in the details in the announced settlement by the U.S. Justice Department with Purdue Pharmaceutical, the maker of the powerful painkiller OxyContin.

Federal prosecutors painted a picture of their planned deal with Purdue as an historic, $8.3 billion knock-out for a company that critics say played a major role in the opioid crisis, with the firm creating a template for hyping falsehoods about the safety and effectiveness of prescription painkillers. As the Washington Post reported, the first glance at the multibillion-dollar Purdue settlement seems tough:

“As part of the settlement, officials said, Purdue Pharma will admit in federal court in New Jersey to defrauding the United States and violating the anti-kickback statute from 2009 to 2017. The settlement includes a criminal fine of more than $3.5 billion, criminal forfeiture of $2 billion and a civil settlement of $2.8 billion.”

But as the newspaper underscores lower down in its article:

“The $8 billion figure is largely symbolic — the bankrupt drug maker is already indebted to states, communities and other creditors. The company is among numerous drug makers and distributors embroiled in litigation over the deaths and economic devastation inflicted by the opioid epidemic. In the past two decades, more than 400,000 Americans have died of opioid overdoses. About 2,800 cities, counties, Native American tribes, and other groups have sued drug retailers, distributors, and manufacturers, including Purdue, in a mammoth case that has been consolidated before a federal court judge in Cleveland. Separately, most states have sued the company in their own courts, believing those venues give them a legal advantage. Those matters are distinct from the federal settlement announced [Oct. 21] and remain ongoing.

“By declaring bankruptcy, Purdue shielded itself from that litigation. Purdue has a tentative deal with about half the states and the lawyers representing the municipalities, but the remainder of the states want the [owner] Sackler family to contribute more. The divide is largely along party lines, with Republican attorneys general agreeing to the deal and Democratic states opposed. Purdue has said it wanted the federal investigations settles before it finalized any global settlement of the thousands of cases.”

But here is just some of the ned in prosecutors’ settlement: It proposes that Purdue be pried from the grip of the plutocratic Sackler clan, as the New York Times reported:

“Purdue has proposed that the company be run as a ‘public benefit corporation,’ with proceeds from continuing limited sales of OxyContin and several overdose-reversing medications under development to go toward opioid abatement. The Justice Department endorses that model. But in a forceful letter addressed to Attorney General William P. Barr earlier this month, the state attorneys general [suing the firm] decried the public trust model. Governments should not be in the opioid business, they said. Instead, they argued that Purdue should be run privately, with government oversight.”

Keeping alive the notoriety of a product like OxyContin also buttresses a financial figment of the proposed Purdue settlement — the idea that the company will throw off billions of dollars to pay aggrieved parties.

But prosecutors for now have blinked at a huge legal pachyderm in their plans — the way they treat Purdue executives and the controlling Sackler family. They have maintained their innocence, insisted that their products were regulator-approved, and that they should not be held accountable for the vicious actions of a few bad folks in their business.

So, while the company fesses up to wrongdoing and issues apologies and takes the hit, its leaders and owners largely do not. As described earlier (including in this blog), the Sacklers — according to critics and legal adversaries — have pulled as much money as they can from Purdue and, while they may end up forking over $3 billion to resolve claims against them, the 20 members of the clan may walk away with as much as $13 billion. As the Washington Post reported:

“In a statement, family members denied criminal and civil culpability. They sought to distinguish between their ownership and leadership of the company, and the individual criminal acts of lower-level managers. ‘No member of the Sackler family was involved in that conduct or served in a management role at Purdue during that time period,’ they said in a statement. The family’s $225 million civil settlement with the government stems from its drive, as past directors of the company, to increase OxyContin sales.

“The family members — including Richard Sackler, David Sackler, Mortimer D.A. Sackler, Kathe Sackler and Jonathan Sackler (who is now deceased) — demanded in 2012 that company executives come up with a plan to generate greater revenue in response to slumping sales, according to the settlement. They approved a new marketing plan … in which ‘Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts’ as their peers,” the Justice Department said.”

Although the U.S. Justice Department said charges may be filed at some point against Sacklers or Purdue executives, those who suffered from the opioid crisis’ ravages assailed the prosecutorial settlement. Lora Goldwater, of North Caldwell, N.J., told the New York Times how she and her family suffered as her son wrestled with opioid addiction that began with OxyContin in college, leading to heroin and seven stints in rehab before he became sober nearly four years ago:

“I’m lucky because my son did not die. But between the ages of 18 and 25, he must have gone to at least half a dozen funerals, if not more, of people who did not make it to the other side. [The Sacklers and Purdue executives] definitely engaged in criminal activity due to greed, insensitivity and because they felt they could get away with it.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by defective and risky products, notably dangerous drugs, especially powerful and addicitive prescription painkillers. Big Pharma, doctors, nurses, hospitals, insurers, and many others in health care have plenty of blame to share for the opioid abuse and drug overdose crisis that has savaged the country — and which has worsened anew during the coronavirus pandemic.

It is never easy in complex civil and criminal cases with huge numbers of claimants to find satisfying ends for all involved. Rich, deep-pocketed defendants can marshal resources that make trials uncertain and give settlements more acceptance. (See Walmart’s new, pre-emptive lawsuit against the federal government, asserting that courts should declare ahead of time that the giant retailer and its pharmacists cannot be held responsible for a role in the opioid crisis).

Still, the pursuit of justice probably should not have a galling end that asks those who suffered great harm to gag down a prospective deal. We have lots of work to battle the nation’s too long opioid abuse and drug overdose nightmare.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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