DOJ reaches $8B settlement with OxyContin maker Purdue Pharma for opioid crisis role

Purdue Pharma logo

The U.S. Department of Justice (DOJ) on Wednesday announced an $8 billion settlement with OxyContin maker Purdue Pharma, widely blamed for fueling the opioid epidemic in the country.

Purdue will make a direct payment to the government of $225 million, which is part of a bigger $2 billion criminal forfeiture. The company also faces a $3.54 billion criminal fine and will also agree to $2.8 billion in damages to resolve its civil liability.

While the settlement resolves criminal and civil probes into how Purdue Pharma marketed its painkillers, the company is tied up in bankruptcy proceedings and lacks the assets to pay the full amount.

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Purdue Pharma is repurposing its assets for public benefit

“We reached today’s agreement in order to facilitate a global resolution that directs substantial funding to communities in need, rather than to years of legal proceedings,” DOJ said in its statement.

“The abuse and diversion of prescription opioids have 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.”

Purdue Pharma is pleading guilty on three counts: two anti-kickback-related raps and one charge of defrauding the United States.

Rosen said the announcement re-affirms that the DOJ “will not relent in its multi-pronged efforts to combat the opioids crisis.”

According to the plea agreement and subject to bankruptcy court approval, Rosen said the company is poised to be dissolved and “won’t exist in its current form.”

Purdue Pharma “deeply regrets and accepts responsibility” for its wrongdoing

Steve Miller, Purdue Pharma’s chairman of the board, said in a statement that the company “deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice.”

Purdue Pharma filed for bankruptcy last year as it faces thousands of civil lawsuits. As part of the deal, the company would transition to a public benefit company owned by a trust or similar entity.

Under a separate settlement, the Sackler family, which controls Purdue Pharma,  agreed to pay $225 million to resolve False Claims Act civil liability. It also resolves the government’s allegations that Purdue Pharma fraudulently transferred assets into the Sackler family holding companies and trusts.

Purdue Pharma’s settlement with the DOJ does not resolve the claims that states filed against the company and/or the Sackler family. It also does not hinder the debtors’ ability to recover any fraudulent transfers of assets.


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