Perdue Pharma pleads guilty to three federal charges, agrees to $8 billion in penalties

Perdue Pharma pleads guilty to three federal charges, agrees to $8 billion in penalties

Perdue Pharma, the maker of OxyContin, pleaded guilty to three federal charges on Wednesday and agreed to $8 billion in penalties as part of a settlement with the U.S. Department of Justice (DOJ) over the company’s role in the opioid epidemic.

The settlement between the DOJ and Perdue resolves the government’s criminal and civil investigations into the company.

“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.”

Perdue will pay $3.544 billion in criminal fines and pay an additional $2 billion in forfeiture of past profits as part of the settlement. The company will also pay $2.8 billion to resolve the company’s civil liabilities.

Because the company filed for bankruptcy in Sept. 2019, the company will be dissolved and reformed as a Public Benefit Company (PBC). As a PBC, the company would continue to operate, however, the focus would be on benefiting the American people instead of maximizing profit. Proceeds from the sales of legitimate drugs would be forwarded to state and local abatement programs.

Additionally, the PBC will donate or provide steep discounts for overdose rescue drugs and medically assisted treatment medications to communities, the DOJ said.

The company pleaded guilty to one charge 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 federal government alleged that between May 2007 and March 2017, Perdue defrauded the U.S. government by misrepresenting to the DEA that the company had an effective anti-diversion program, when, in fact, the company continued to market its opioid products to more than 100 health care providers the company had good reason to believe were diverting opioids to patients for non-medical purposes.

Additionally, the DOJ said Perdue between June 2009 and March 2017, the company paid doctors through its doctor speaker program to induce them to write more prescriptions for opioid products, as well as making payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending and arranging for the ordering of Perdue’s extended release opioid products, both violations of the Federal Anti-Kickback Statute.

“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.”