Purdue Pharma LP’s $8.3 billion settlement with the U.S. government calling for the drugmaker to plead guilty to three felonies for illegally marketing its opioid-based OxyContin painkiller can move forward, a judge concluded.
Purdue officials said Tuesday U.S. Bankruptcy Judge Robert Drain’s approval of the deal is an “essential step” in their push to resolve more than 2,000 lawsuits accusing the company of helping to fuel the U.S. opioid epidemic by wrongfully promoting the painkiller.
The judge also ruled members of the billionaire Sackler family — who now own Purdue — can make a $225 million settlement payment to the government without creating other obstacles in the company’s bankruptcy case.
Drain’s sign-off on the plea deal will help advance Purdue’s effort to provide “financial resources and lifesaving medicines to address the opioid crisis,” company officials said in an emailed statement.
Purdue officials are proposing to turn over the company to states and local governments along with as much as $3 billion in cash from members of the Sackler family as part of a bankruptcy plan to resolve all its opioid liability.
The family would no longer own the drugmaker under the deal, which has been valued at about $10 billion. A group of state attorneys general and opioid victims objected to having governments forced to get into the drug business to generate funds to beef up opioid-treatment programs.
States and municipalities sued Purdue and other makers and distributors of opioids in hopes of recouping billions spent dealing with the fallout from the public health crisis. More than 400,000 Americans have died in opioid-related deaths over the last 20 years.
Opponents of Purdue’s plan to hand over the company rather than sell it at a bankruptcy auction point to the incongruity of public entities generating funds for treatment programs through sales of the highly addictive pills. The handover is included in the U.S. Department of Justice deal.
“The DOJ settlement mandates the preservation of the OxyContin business under the government’s protection,” according to court filings by a group of families victimized by the opioid epidemic.
“This requirement in the settlement is improper, corrosive to public faith in government, and offensive to the tens of thousands of families who have been harmed,” the group added.
Purdue’s guilty pleas to conspiracy and violating federal kickback laws in federal court in New Jersey could come as early as next week.
Some objectors also questioned whether clearing the Sacklers’ payment to the federal government to resolve their civil liability for the company’s opioid-marketing miscues would create problems for ongoing opioid settlement talks before a mediator.
“Making this payment would not materially impede the mediation” between states, local governments and Purdue, Drain said at Tuesday’s hearing in White Plains, New York.
A representative of the Mortimer Sackler wing of the family declined to comment. A spokesman for the Raymond Sackler wing didn’t immediately return an email for comment.
The $225 million settlement resolved allegations board members — including Richard Sackler, David Sackler and Mortimer Sackler — pressured Purdue executives to pump up OxyContin sales in 2012 when the legitimate market for the drug had dwindled, prosecutors said in connection with the deal.
Under a plan the family members approved, Purdue’s sales representatives stepped up their OxyContin marketing to high-volume prescribers, which resulted in the addictive pills being used in ways that were “unsafe, ineffective and medically unnecessary,” the government said in court filings.
— Bloomberg News