Joe Rice, a negotiator for local governments that are suing Purdue, said, “Purdue is doing everything they can to get this deal done in this administration. It’s advantageous to both sides.”
This federal case against Purdue is distinct from thousands of opioid-related lawsuits against other drug manufacturers, as well as distributors and pharmacy chains, still pending in federal and state courts.
Purdue has long demanded that the federal charges against it be resolved before it would agree to a larger settlement with cities, tribes, states and individuals, who claim that its relentless marketing of OxyContin directly contributed to a crisis of addiction and overdoses, resulting in towering costs in health care, law enforcement and unemployment. Lawyers close to negotiations expect that the final settlement may emerge early next year.
In the federal settlement, the company agreed to plead guilty to felony charges of defrauding federal health agencies and violating anti-kickback laws. The penalties include $3.54 billion in criminal fines and $2 billion in criminal forfeiture of profits, the largest penalties ever levied against a pharmaceutical manufacturer. The company pleaded guilty to marketing opioids to more than 100 doctors that it suspected of writing illegal prescriptions and lying about this to the federal Drug Enforcement Administration.
Purdue also pleaded guilty to paying illegal kickbacks to doctors and to an electronic health records company, Practice Fusion. In January Practice Fusion paid $145 million in fines for taking kickbacks from drug manufacturers in exchange for embedding pop-up alerts to physicians, intended to boost opioid prescriptions.
The Purdue settlement also includes $2.8 billion in civil penalties, related to allegations that the company violated the False Claims Act by using aggressive marketing tactics to convince doctors to unnecessarily prescribe opioids — frivolous prescriptions that experts say helped fuel a drug addiction crisis that has ravaged America for decades. Those prescriptions were often paid for by federal health care programs like Medicare and Medicaid.
Mr. Miller, the Purdue chairman, said that the resolution of the Justice Department’s charges was an essential step in the company’s bankruptcy restructuring. “Purdue today is a very different company,” he added. “We have made significant changes to our leadership, operations, governance and oversight.”