OxyContin Maker Pleads Guilty Over Three Felony Offenses

OxyContin Maker Pleads Guilty Over Three Felony Offenses

Introduction

On Tuesday, OxyContin manufacturer Purdue Pharma LP CEO and Chairman pleaded guilty on behalf of the company to three-count felony offenses, which include 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 top officers faced a series of questions in a teleconference proceeding from Assistant U.S. Attorney J. Stephen Ferketic over the company's knowledge, conduct, and offenses dating to 2007.

During the hourlong plea hearing convened in New Jersey federal court by U.S. District Judge Madeline Cox Arleo, the company admitted that it made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more opioid prescriptions. The company also acknowledged that it 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.

According to the terms of the plea agreement, the company will pay penalties considered to be the largest ever levied against a pharmaceutical manufacturer. The penalties include a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture, of which the company will pay $225 million within three business days following the entry of a judgment of conviction in accordance with the Plea Agreement.

The company also agreed to a civil settlement of $2.8 billion to resolve its civil liability under the False Claims Act, and the Sackler family agreed to pay $225 million in damages to resolve its civil FCA violations liability.

Last week, the bankruptcy court in the Southern District of New York approved the financial terms of the global resolution with the company. According to the resolution, the company will close down, and a new "public benefit company (PBC)" will be formed using its assets. The newly formed company will be controlled by a trust or similar entity meant for the benefit of the nation's public. The future earnings of the company will be used to compensate for the fines and penalties. Based on PBC's potential value to state and local governments, the U.S. Department of Justice (DOJ) said that it is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount.