The following is the full press release from the US Department of Justice about their
“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” said Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott. “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted, The DOJ wrote.
“Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy,” they wrote.
The US Department of Justice Department Announces Global Resolution of Criminal and Civil Investigations with Opioid Manufacturer Purdue Pharma and Civil Settlement with Members of the Sackler Family
Today, the Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP (Purdue), and a civil resolution of its civil investigation into individual shareholders from the Sackler family. The resolutions with Purdue are subject to the approval of the bankruptcy court.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”
“Today’s resolution is the result of years of hard work by the FBI and its partners to combat the opioid crisis in the U.S.,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office. “Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients. The FBI remains committed to holding companies accountable for their illegal and inexcusable activity and to seeking justice, on behalf of the victims, for those who contributed to the opioid crisis.”
“The opioid epidemic remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary L. Cantrell Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services’ Office of Inspector General. “Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being. With our law enforcement partners, we will continue to combat the opioid crisis, including holding the pharmaceutical industry and its executives accountable.”
“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” said Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott. “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted. DEA will continue to work tirelessly with our partners and the pharmaceutical industry to address the damage that has been done, and bring an end to this epidemic that has gripped the nation for far too long.”
Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.
The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.
While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest. Indeed, not only will the PBC endeavor to deliver legitimate prescription drugs in a manner as safe as possible, but it will aim to donate, or provide steep discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, and the proceeds of the trust will be directed toward State and local opioid abatement programs. Based on the value that would be conferred to State and local governments through the PBC, the department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount. The department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC so that its public health goals can be best accomplished.
The Criminal Pleas
As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas. The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion. The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.
In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.
The Civil Settlements
The department’s civil settlements resolve the United States’ claims as to both Purdue and its individual shareholders, members of the Sackler family.
The civil settlement with Purdue provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion. This settlement resolves allegations that from 2010 to 2018, Purdue caused false claims to be submitted to federal health care programs, specifically Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Indian Health Service. The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion. For example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times. It also resolves the government’s allegations that Purdue engaged in three different kickback schemes to induce prescriptions of its opioids. First, Purdue paid certain doctors ostensibly to provide educational talks to other health care professionals and serve as consultants, but in reality to induce them to prescribe more OxyContin. Second, Purdue paid kickbacks to Practice Fusion, as described above. Third, Purdue entered into contracts with certain specialty pharmacies to fill prescriptions for Purdue’s opioid drugs that other pharmacies had rejected as potentially lacking medical necessity.
Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers). This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted. Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market. The Named Sacklers then approved a new marketing program beginning in 2013 called “Evolve to Excellence,” through 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, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.
The civil settlement also resolves the government’s allegations that from approximately 2008 to 2018, at the Named Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were otherwise voidable as fraudulent transfers.
Today’s resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers.
Today’s announcement was made by Deputy Attorney General Jeffrey A. Rosen; Acting Assistant Attorney General of the Civil Division Jeffrey Clark; U.S. Attorney for the District of Vermont Christina Nolan; and First Assistant U.S. Attorney for the District of New Jersey Rachael Honig. The criminal investigation was conducted by the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, the Consumer Protection Branch of the Department of Justice’s Civil Division, and the FBI’s Washington, D.C. and Newark Field Offices, with assistance by DEA. The civil settlements were handled by the Fraud Section of the Commercial Litigation Branch of the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, with assistance from the Department of Health and Human Services, Office of General Counsel and Office of Counsel to the Inspector General; the Defense Health Agency; and the Office of Personnel Management. The Purdue bankruptcy matter is being handled by the U.S. Attorney’s Office for the Southern District of New York and the Civil Division’s Commercial Litigation Branch, Corporate/Finance Section.
Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only. There has been no determination of liability in the civil matters.
Remarks by Deputy Attorney General Jeffrey A. Rosen on the Resolution of Civil and Criminal Investigations into Purdue Pharma and the Sackler FamilyWashington, DC ~ Wednesday, October 21, 2020
Remarks as Prepared for Delivery
Good morning. I am pleased to be joined today by Vermont’s U.S. Attorney Christina Nolan, New Jersey’s First Assistant U.S. Attorney Rachael Honig, Acting Assistant Attorney General for the Civil Division Jeff Clark, and Eastern Texas U.S. Attorney Steve Cox.
This morning, subject to court approval, the Department of Justice is announcing a global resolution of our criminal and civil investigations into the opioid manufacturer Purdue Pharma, as well as a civil resolution with members of the Sackler family who comprise the shareholders of the company.
Before we address the specific terms, I want to provide some context of how today’s announcement fits into Department of Justice’s wider efforts to address the opioids crisis.
Department of Justice obviously has many longstanding and ongoing drug enforcement activities. But during this administration we have augmented those with a series of new initiatives targeted at both illicit opioids like heroin and fentanyl, and at the diversion and abuse of prescription opioids as well. These are shown on the chart we have today: JCODE and Operation SOS on the illicit side, and PIL Task Force, ARPO, OFADU, and Health Care Fraud Strike Forces on the prescription side. By these efforts, we have targeted unlawful activity involving opioids at every level of the supply chains. On the prescription side, that means any unlawful actions by manufacturers, distributors, pharmacy dispensers, or physician prescribers, for example.
So today’s announcement involves one of the most important participants in the supply chain of prescription opioids, at the manufacturer level. And a resolution which, if approved by the court, will redress past wrongs, and will also provide extraordinary new resources for treatment and care of those affected by opioids addiction.
The global settlement announced today involves the company pleading guilty to three felony counts for defrauding the United States and violating the Anti-Kickback Statute from 2009 to 2017. In addition to agreeing to plead guilty to these three felony counts, the company has agreed to a $3.544 billion criminal fine and a $2 billion criminal forfeiture amount. Further, to resolve its civil liability, Purdue Pharma has agreed to $2.8 billion in damages to the United States. The company is in bankruptcy, so the corporate resolution is subject to the bankruptcy court’s approval. If approved, this will be a corporate settlement totaling more than $8.3 billion. Additionally, members of the Sackler family have agreed to pay $225 million in a civil settlement that will provide civil releases only.
It is important to note that this resolution does not prohibit future criminal or civil penalties against Purdue Pharma’s executives or employees.
This resolution must be understood against two larger contexts: first, the company’s bankruptcy, and, second, as I’ve referenced, the department’s overarching work addressing the opioids crisis.
The company’s bankruptcy in the Southern District of New York involves many creditors, from private creditors to Federal, state, and local creditors. In general, the creditors are aiming to ensure that nearly all of the proceeds of the bankruptcy go to opioid abatement programs, and the Department of Justice supports that goal.
To that end, a key piece of today’s resolution is based on the future of Purdue Pharma. The agreed resolution, if approved, will require that the company must dissolve and no longer exist in its present form, the Sacklers must relinquish all ownership and control of the company (and its successors), and the assets must be transferred to a new public benefit company or PBC owned by a trust for the benefit the American public. The PBC would be charged with providing its medicines in a manner as safe as possible, without diversions, while providing millions of doses of medicines to treat opioids addiction and reverse overdoses and otherwise taking into account long-term public health interests. And, to be clear, the Sackler family will have no role in creating or controlling the PBC.
If the bankruptcy court approves this, the department will credit the company for the value conferred through the PBC against the criminal forfeiture amount, except for $225 million that will be paid to the United States on the bankruptcy effective date. (The criminal fines and civil damages would not be affected by this.)
This global resolution builds on the department’s other recent opioid successes. Just as the Department prosecutes illicit drug traffickers, the department is committed to doing the same with respect to abuse and diversion of prescription opioids. We have prosecuted medical professionals who have contributed to overdose deaths, run “pill mills,” or defrauded the federal government’s health care programs. We have also prosecuted opioid distributors like McKesson, Miami-Luken, and Rochester Drug Cooperative. We reached substantial settlement resolutions with other manufacturers, such as RB Group and Indivior, as well as Insys.
These are all examples of the department’s unwavering commitment to turn the tide of the opioid crisis ravaging this country. Today’s announcement focuses on the problems from wrongful activities in the prescription opioids realm, so let me note that our efforts there appear to be making a difference. The CDC reports that since 2017, prescription opioid overdose deaths have decreased–by over 18 percent in the first two years. And there has been a 47 percent decline in prescription opioids being dispensed.
But we will continue all of our efforts, including building on the record 8,136 opioids prosecutions in 2019. And not only through enforcement: for example, the department’s Office of Justice Programs awarded grants totaling more than $341 million to help fight the addiction crisis looming over the United States.
VIDEO OF THE DAYIdiots Twerk On Ambulance After Shooting In Oakland, CA
Today’s announcement is very much a success story in the close coordination between the U.S. Attorney’s Office in New Jersey, the U.S. Attorney’s Office in Vermont, the Civil Division’s Consumer Protection Branch and its Civil Frauds Section, and I also want to thank the important contributions of law enforcement, including the FBI, DEA and HHS-OIG, who would normally be with us but because of the pandemic we’ve limited the number of people on the stage today. I want to thank this entire team for their relentless work in bringing about this resolution.
Today’s announcement is particularly timely given that October is National Substance Abuse Prevention Month, and a few days from now, October 24, is DEA’s National Prescription Drug Take Back Day, which allows for a safe, convenient, and responsible means of disposing of unneeded prescription drugs that are sitting in medicine cabinets at homes. Keeping the American people safe is the Department of Justice’s highest priority. As today’s announcement re-affirms, the department will not relent in our efforts to combat the opioids crisis.
Kari is an ex-Community Organizer who writes about Voter Engagement, Cultural Marxism and Campaigns. She has been a grassroots volunteer with the GOP, on and off for 18 years. She is a Homeschool Mom in North Carolina and loves Photojournalism and Citizen Journalism. @Saorsa1776