BREAKING: Oxycontin maker Purdue Pharma will plead guilty to three criminal charges and agree to $8 billion plea deal that does NOT release its owners – the wealthy Sackler family – from criminal liability
Purdue Pharma, the company that makes OxyContin, the powerful prescription painkiller that experts say helped touch off an opioid epidemic, will plead guilty to three federal criminal charges as part of a settlement of more than $8 billion, Justice Department officials told The Associated Press.
The company will plead guilty to a criminal information being filed Wednesday in federal court in New Jersey to three counts, including conspiracy to defraud the United States and violating federal anti-kickback laws, the officials said.
The deal does not release any of the company´s executives or owners – members of the wealthy Sackler family – from criminal liability.
A criminal investigation is still ongoing.
The officials were not authorized to discuss the investigation publicly and spoke on condition of anonymity.
Oxycontin maker Purdue Pharma will plead guilty to three criminal charges and agree to $8 billion plea deal that does NOT release its owners – the wealthy Sackler family – from criminal liability
The settlement is the highest-profile display yet of the federal government seeking to hold a major drugmaker responsible for an opioid addiction and overdose crisis linked to more than 470,000 deaths in the country since 2000.
The settlement comes less than two weeks before a presidential election where the opioid epidemic has taken a political back seat to the coronavirus pandemic and other issues. But the deal does give President Donald Trump´s administration an example of action on the addiction crisis, which he promised early in his term.
As part of the resolution, Purdue will admit that it impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company’s manufacturing quotas, the officials said.
A Justice Department official said Purdue had been representing to the DEA that it had ‘robust controls’ to avoid opioid diversion but instead had been ‘disregarding red flags their own systems were sending up.’
Purdue will also admit to violating federal anti-kickback laws by paying doctors, through a speaking program, to induce them to write more prescriptions for the company´s opioids and for using electronic health records software to influence the prescription of pain medication, according to the officials.
Purdue will make a direct payment to the government of $225 million, which is part of a larger $2 billion criminal forfeiture. In addition to that forfeiture, Purdue also faces a $3.54 billion criminal fine, though that money probably will not be fully collected because it will be taken through a bankruptcy, which includes a large number of other creditors. Purdue will also agree to $2.8 billion in damages to resolve its civil liability.
Purdue would transform into a public benefit company, meaning it would be governed by a trust that has to balance the trust´s interests against those of the American public and public health, the officials said. The Sacklers would not be involved in the new company and part of the money from the settlement would go to aid in medically assisted treatment and other drug programs to combat the opioid epidemic, the officials said. That arrangement mirrors a key element of the company’s proposal to settle about 3,000 lawsuits filed by state, local and Native American tribal governments.
Purdue Pharmaceuticals will plead guilty to to three counts of criminal charges filed Wednesday in federal court in New Jersey, officials said
As part of the plea deal, the company admits it violated federal law and ‘knowingly and intentionally conspired and agreed with others to aid and abet’ the dispensing of medication from doctors ‘without a legitimate medical purpose and outside the usual course of professional practice,’ according to a copy of the plea agreement obtained by the AP.
The company is also required to cooperate with the ongoing federal investigation and potential other prosecutions.
But even before the deal was announced, it was facing resistance from state attorneys general, Democratic members of Congress and advocates who wrote Attorney General William Barr asking him not to make the bargain with the company and the family. They said it does not hold them properly accountable and they raised concerns about some of the details.
‘Millions of American families impacted by the opioid epidemic are looking to you and your Department for justice. Justice for the sleepless nights spent worrying about sons and daughters trapped in the grip of substance use disorder, justice for the jobs lost and the lives ruined, and justice for the lives of loved ones lost to overdoses,’ 38 Democratic members of Congress wrote. ‘If the only practical consequence of your Department´s investigation is that a handful of billionaires are made slightly less rich, we fear that the American people will lose faith in the ability of the Department to provide accountability and equal justice under the law.’
The Sackler family has already pledged to hand over the company itself plus at least $3 billion to resolve thousands of suits against the Stamford, Connecticut-based drugmaker. The company – but not the family – declared bankruptcy as a way to work out that plan, which could be worth $10 billion over time.
About half the states oppose that settlement, and also wrote Barr to ask him not to make the federal deal that includes converting Purdue into a public benefit corporation. They say it would be wrong for governments to rely on earnings from the sale of more OxyContin to fund programs to mitigate the toll of an opioid crisis wrought by prescription drugs as well as heroin and illicitly produced fentanyl.
With the terms of the Justice Department deal, the federal government gives a strong endorsement to the idea of a version of Purdue continuing as a ‘public benefit corporation.’ If that plan does not end of being the heart of the reorganization through bankruptcy court, the U.S. could make Purdue pay it more, potentially unraveling any other settlement arrangement.
The state governments that oppose the settlements are pushing in bankruptcy court for documents that would spell out how much Sackler family members made from the sale of OxyContin over the years.
The Sackler family was once listed among the nation´s wealthiest by Forbes magazine. A 2019 court filing said they had made up to $13 billion over the years from the blockbuster drug, though a lawyer said they brought in far less after taxes and reinvestment in the company.
Until recently, the family´s name was on museum galleries and educational programs around the world because of gifts from family members. But under pressure from activists, institutions from the Louvre in Paris to Tufts University in Massachusetts have dissociated themselves from the family in the last few years.
It´s not the first time Purdue has admitted wrongdoing: The company and three executives pleaded guilty to federal criminal charges in 2007 and paid more than $630 million in a settlement. But after that, the nation´s addiction crisis only deepened.
As the maker of the best-known prescription opioid, Purdue is the highest-profile player in the opioid crisis, but it´s far from the other one. Trials against other drugmakers and distributors that were scheduled for this year have been pushed back due to the coronavirus.
WHO ARE THE SACKLERS?
Purdue Pharma, which is run by some members of the wealthy Sackler family, has made tens of billions on opioid sales. Here is a breakdown of who the Sacklers are, including those who have and haven’t been involved in Purdue Pharma:
Arthur, a doctor and psychiatrist, founded a research laboratory in 1938, but Arthur’s real genius was in marketing and he leveraged it to sell a number of medications, including the anti-anxiety drug, Valium.
He and his younger brothers Mortimer and Raymond owned a small pharma company called Purdue Frederick that they purchased in 1952. That company produced betadine and earwax.
Arthur remained a relatively silent partner in the old Purdue and died in 1987 before it became the company we know it as today.
He never saw any of Purdue’s OxyContin profits.
He donated the funds to open a number of medical education programs, libraries and museums.
Arthur was inducted into the Medical Marketing Hall of Fame upon his death in 1987.
After his death in 1987, his brothers bought Arthur’s portion of the company.
One of his four children, daughter Elizabeth, has largely taken over his philanthropy work.
Arthur and his heirs have had no involvement in Purdue Pharma or with OxyContin.
Mortimer was an American physician and psychiatrist.
He and his brothers, the older Arthur and the younger Raymond published prolific medical research before buying a number of pharmaceutical companies, including, in 1952, Purdue Frederick.
After Arthur’s death Mortimer and Raymond bought out his descendants’ share of Purdue Frederick, and in 1991 they created the company that would become a pain management giant we now know, Purdue Pharma.
Mortimer became a lavish arts patron, known for equally extravagant donations and parties, beginning in the 1970s.
He died in 2010.
Raymond was a doctor like his older brothers, and the three were partners in all things until each of their deaths.
Together with Mortimer, Raymond found success with their opioid painkiller, OxyContin, which became the Purdue Pharma’s signature drug.
Raymond was milder and more private than his brother, Mortimer.
Raymond had two children, Richard and Jonathan, before his death last year.
Mortimer’s eldest daughter with his first wife.
She was listed as a director of Purdue’s sister company, UK-based Napp Pharamaceutical Holdings, as of December 2016.
She lives in an apartment in an iconic Upper West Side which she owns.
Its total value is estimated to be more than $122million.
Kathe is one of the directors of Napp, a UK-based company which also sold OxyContin.
She owns two suburban properties in Connecticut which are separated by another owned by someone else and she lives in an Upper East Side townhouse with her wife, Susan Shack Sackler.
The house was owned by both Raymond and Mortimer. Their children share it.
Kathe and Ilene had a brother, Robert, is deceased.
JONATHAN AND RICHARD SACKLER
They are Raymond and Beverly’s two sons.
Jonathan and his wife live in Greenwich, Connecticut, in a property next to his mother’s. Richard ‘s former family home is not far away in neighboring Stamford.
They have a cancer research center named after them at Yale and have both held positions at Purdue.
Richard Sackler followed in his father’s footsteps, getting his medical degree at New York University School of Medicine.
He came to Purdue after medical school, leading the research and development that ultimately produced the extended release form of OxyContin that would elevate the family’s fortune to previously unfathomable.
He became president of Purdue in 1991, pioneering marketing campaigns that enticed droves of medical professionals to buy Purdue’s opioid.
Richard became co-chairman in 2003, by which point $1.6 billion in OxyContin had been sold.
His marketing schemes sparked suspicion, and in 2015, Richard was deposed before his company paid out a $24 million settlement.
The company appealed in 2017, but the case has not moved forward.
In addition to his arts philanthropy, Richard’s foundations have donated to controversial causes, including anti-Muslim groups.
Arthur’s daughter has publicly and persistently attempted to distance herself from branch of her family that has profited from OxyContin.
Elizabeth is a licensed psychiatrist and well-known philanthropist.
She is the founder of an eponymous Center for Feminist Art at the Brooklyn Museum in New York.
She has previously expressed disgrace for her uncles’ business.
Elizabeth has previously told DailyMail.com: ‘I, nor my siblings, nor my children have ever owned or benefited from Purdue Pharma or OxyContin or oxycodone.
‘It’s another branch of the family.’
BEVERLY AND THERESA SACKLER
Theresa, 69, owns a $45million Upper East Side apartment building but lives mostly in the UK on a 10-acre estate in the Berkshire countryside.
She is known in the UK as Dame Theresa Sackler, a title she was awarded for her sustained philanthropy and support of the arts.
Theresa is more visible than her sister-in-law.
Beverly, 94, is Raymond’s widow. She lives on a Greenwich, Connecticut waterfront estate which has an estimated land and property value of almost $50million. She also owns a 17-floor Fifth Avenue building in Manhattan.
When her husband was still alive, they donated the Raymond and Beverly Sackler Institute for Biological, Physical and Engineering Sciences at Yale. It now employs 50 people across 20 departments.
MORTIMER DAVID ALFONS SACKLER
Mortimer the only son of founding brother Mortimer, Mortimer II’s mother is Gertraud Wimmer, Mortimer’s second wife.
Mortimer David owns a luxury condo building in Boston and lives in New York City with his 42-year-old wife Jacqueline.
The couple are a regular fixture on the Manhattan social circuit.
DAVID AND JOSS SACKLER
David is intensely private but his wife, Joss, is not.
She runs the members-only women’s social club, LBV.
Among its events are group workouts at the model haven gym Dog Pound and talks such as ‘how to have the money talk with your kids.’
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