Purdue Pharma LP, the pharmaceutical company owned by the Sackler family and the manufacturer of OxyContin, agreed to plead guilty to three criminal charges over its involvement in fueling the opioid crisis in the U.S. The company will also pay $8.3 billion to settle federal probes over its marketing practices of the highly addictive painkiller.
As per the settlement agreement, the company will close down, and a new "public benefit company" 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.
The settlement amount will be used to aid the opioid treatment and abatement programs. The company agreed to pay a $3.5 billion fine, $2 billion as a forfeit in past profits, and $2.8 billion in civil liability. Currently, the company doesn't have $8 billion in cash to settle the fines. Hence the formation of a new company is set forth.
The new company will manufacture painkillers such as OxyContin, along with life-saving overdose rescue drugs and medically assisted treatment medications, which will be made available at a discounted rate to the communities hit with the opioid crisis.
The U.S. Department of Justice (DOJ) said that the Sackler family would have to pay a separate $225 million civil settlement to the government immediately and another $250 million after its bankruptcy is concluded.
Some states and Deputy Attorney General Jeffrey Rosen, who announced the settlement, are defending the plans for selling OxyContin. Last week, twenty-five state attorneys general argued in a letter sent to U.S. Attorney General William Barr over the plans to create a government-controlled company out of the assets of Purdue Pharma and that the government should not involve in the opioid business.
Last week, two other manufacturers involved in the opioid crisis announced settlement news to end the epidemic caused by them. Connecticut Attorney General William Tong announced that Mallinckrodt Pharmaceuticals agreed to pay $1.6 billion to resolve the mounting opioid lawsuits, and secondly, Johnson & Johnson (J&J) issued a press release indicating that it would contribute $1 billion more to the originally proposed $4 billion opioid settlement fund in October 2019.