Purdue Pharma to dissolve, pay $225M fine for role in opioid epidemic

A federal judge on Tuesday ordered the OxyContin maker to dissolve and pay millions in fines for its role in fueling America’s opioid addiction epidemic. Purdue will reemerge as a public benefit company focused on furthering the public good, according to one of the stipulations included in the negotiated settlement Purdue brokered with federal prosecutors in 2020.

The pharmaceutical company previously pleaded guilty to conspiring to defraud the United States and conspiring to violate federal anti-kickback laws. Purdue admitted to reporting misleading information to the Drug Enforcement Administration and indirectly paying doctors to prescribe the addictive painkillers. U.S. District Judge Madeline Cox Arleo heard testimony from individuals who lost loved ones or were otherwise impacted by OxyContin before delivering the sentence.

Purdue put profits over patient safety and ultimately contributed to the opioid crisis that killed countless individuals, according to a Tuesday statement from acting Attorney General Todd Blanche. This sentence is a prime example of the Department of Justice’s work to redress the wrongs of companies and root out illegal conduct, he added.

Didn’t the DOJ say the company would owe over $8 billion? The initial sentencing agreement did include over $8 billion, but Arleo’s sentencing only included $5.5 billion. The sentencing amount included a $3.5 billion criminal fine and $2 billion in criminal forfeiture.

The DOJ noted that the $3.5 billion fine will be assessed in connection with the company’s bankruptcy proceedings. Federal prosecutors also agreed to credit Purdue $1.8 billion against the remaining $2 billion in exchange for settling thousands of lawsuits brought by state and local governments, along with Native American tribes, as well as agreeing to dissolve and restructure itself as a public benefit company or similar organization. The company technically only owes about $225 million directly to the federal government under the settlement.

Dig deeper: Listen to Grace Snell’s report on The World and Everything in It about former addicts weighing in on the right approach to solving the nation’s opioid epidemic.