Purdue Pharma
Purdue Pharma is a company dealing with pharmaceutical products and is owned mainly by Sackler family members. The company currently focuses on medications that manage pain and perceives itself as a pioneer in developing medicines that reduce pain. The company has employed more than 1600 persons by September 2015. in the same year, it acquired VM Pharma to access global development and trade rights. The pharmaceutical company manufactures pain medicines, such as Oxycodone, hydrocodone, OxyContin, and MS Contine. Some of these drugs have sparked controversy due to their potential in resulting in addiction. OxyContin and MS Contin medications, for instance, are abused in most cases by chewing, snorting, or through injection to the bloodstream. Such ingestion and abuse pose health hazards to abusers as they can result in overdose and death. The introduction of OxyContin in 1995 was a breakthrough for the company in developing a palliative for chronic pain (Kornfield et al., 2020).
Lawsuits against OxyContin in the Past
The company has been involved in prescription drug abuse measures, specifically its OxyContin product, as it causes addiction to its users. The company was issued with a statement by the Attorney General of Connecticut in 2001, which urged it to act on the case about OxyContin abuse. The AG argued that despite the sincerity of the Pharma, it took no action.
The West Virginia AG has also sued the company for reimbursing the high cost of prescription that the state paid. The government observed that patients were taking more medications, which created suspicion, resulting in the company being sued for deceptive marketing. The company has agreed to plead to three charges of a felony that includes Double-object conspiracy in defrauding the US and violating the Food, Drug, and Cosmetic Act. In addition, the company has also agreed to plead two counts of conspiracy to violate the Federal Anti-Kickback Statute. However, the settlement is not a release to the company’s executives from criminal liability as investigations of the crime are still ongoing. According to experts, an opioid painkiller, OxyContin, aided in fuelling the US’s deadly opioid epidemic. Opioid overdose accounted for more than 40,000 deaths in 2016 and 450,000 deaths over the past two decades. The abuse and diversion of opioids contribute to the national tragedy of addiction s and death(Kornfield et al., 2020).
Current Charges Facing Purdue Pharma
The Washington Post reports that Purdue Pharma actively frustrated the efforts of ensuring compliance and diversion prevention by the United States. According to an assistant administrator with the DEA (Drug Enforcement Administration) Tim McDermott, the decimating ripple impact of the Pharma’s action left many lives lost and others as addicts. The pharmaceutical company through Steve Miller, the company’s board chairperson from 2018, stated that Purdue regrets and accepts responsibility by the DoJ in the agreed fact statement. Currently, there are no Sackler family members on the board despite them owning Purdue Pharma. The Sacklers also issued a statement expressing their heartfelt compassion for victims suffering from opioid addiction and abuse. They further stated their hope for the quick implementation of the proposal, which would help in addressing their critical needs.
Plea Agreement and Charge
In a letter directed to one Mr. Fitzgerald dated 20TH October 2020 regarding plea agreement with Purdue Pharma LP, a plea settlement is set between the office of the US Attorney’s Office in New Jersey. The DoJ accepted Purdue’s guilty pleas to three-count information, which was to be filled in New Jersey court. The United States has the legality to prosecute persons or entities including, though not limited to, former and present owners, directors, officers, agents, or employees of Purdue, about the conduct contained by the plea agreement. In terms of sentencing, violating Title 18, US Code, to which the company agreed to plead has a maximum of five years of probation time and a statutory fine of greater or equaling to $500,000, or twice the amount (Kornfield et al., 2020).
Consented Disposition
The US, through the DoJ and Purdue Pharma, agreed on four disposition as named above. In terms of fine, the imposed sentence orders a criminal fine of $3.4 billion. The Pharma also consents to enter a forfeiture judgment amounting to 2billion dollars, and in terms of restitution, they both agree that no rebate should be documented, arguing that it is not practical administratively in the case (Kornfield et al., 2020). Its attempt would complicate and prolong the process of sentencing, outweighing the need for providing restitution. In addition to the three disposition, the pharmaceutical company would also be subject to a probation term.
The DoJ’s Rights in Relation to Sentencing and Stipulations
According to the Washington Post report, the US Department of Justice reserves the right to take any position regarding the appropriate sentence to be imposed on the company. The DoJ also reserves the right to correct sentiments relating to proceedings of a sentence. Both the DoJ and the Pharma agree to the charges, which make part of the plea agreement. The DoJ also points out that it would not bring other criminal charges to the pre-existing three counts. The provision on non-prosecution is binding on all the DoJs in the US, as the Washington Post reports.
In addition to agreeing to the three counts, Purdue would also admit that in the period of June 2007 and March 2017, it facilitated payment to two medical officers via its speaker programs, aiming at inducing the doctors to write more OxyContin prescription (Kornfield et al., 2020). Besides, from April 2016 to December 2016, it made payments to an electronic health records company named Practice Fusion Inc. as an exchange for reference, recommendation, and arrangement for the ordering of Purdue Pharma’s extended opioid release.
Consistency of the Fine with the U.S.S.G
The DoJ and the Pharma company both agreed that the $8 billion is in line with the United States Sentencing Guidelines. The charges also take to account the company’s conduct under Title 18, Sections 3572 and 3553, and the US Code. The sentencing guidelines were also calculated as both agree that fair calculation of base Guidelines be at $2 billion, reached as an estimate of pecuniary loss from the crimes. Purdue continued marketing its opioid products to over 100 health care providers. Purdue had concrete reasons to believe were carrying out diversion of their OxyContin product, and giving misleading information to the DEA with the aim of boosting its manufacturing quotas.
DoJ and Purdue Pharma Settlement
The DoJ announcement of the $8 billion settlement with Purdue Pharma has seen the Sackler family members being fined a civil penalty of $225 million and investigation of the crime proceeds. According to Kornfield et al. (2020), the Department of Justice in the United States pointed that the company agreed to plead guilty to charges of crime and penalties of approximately $8.3 billion for its role in opioids epidemics. The announcement by DoJ pushes to settle outstanding investigations involving major corporations. More often, administrations try to resolve significant cases towards the end of their term of office. As the United States drew near the elections, president Trump’s administration continuously pushed to conclude a number of such pertinent matters in October.
What Pleading Guilty to Charges could Mean to Purdue
Purdue Pharma has been involved in numerous lawsuits. States and Justice departments have been engaged in a brawl with the company over its products and its effects on people. OxyContin has paved the way for lawsuits, incurring high costs to the company. In 2007, the company agreed to charges of misleading people regarding the addiction risk of OxyContin, which led to it paying $600 million, and is considered one of the highest settlements in pharmaceuticals in the history of the US the individual charges of misbranding, which is was a criminal violation committed by the company’s President, would also resurface among other crimes if the company pleads guilty. As Purdue’s owners have already agreed to pay $225 million as a civil penalty, prosecutors have cautioned that the settlement is not a preclusion of criminal charges against the top management of the Pharma. The settlement also gives the Department of Justice and President Trump’s administration an achievement. President Trump emerged victorious in the 2016 elections because he pledged to combat opioid addiction, which had already taken a large part of the country and is still an issue in fundamental swing states.
Impacts of the Plea by Purdue
The settlement between DoJ and Pharma would be the highest of the display yet of the US government. The DoJ seeks to hold responsible known drug makers for opioid addiction and crisis in overdose. The company has also resolved that it would admit impeding the DEA by falsifying an effective drug diversion program. The company’s admission that it reported misleading information to DEA to boost its manufacturing quotas would also weigh heavily on its reputation. In terms of profits, the company would suffer a setback in regaining its losses after the pleas. As it has already pledged to make a direct payment of $225 million to the federal government, this is just a portion of the larger $2 billion criminal forfeiture (Kornfield et al., 2020).
Bankruptcy
2019 witnessed so the company filing for bankruptcy, and the news was welcomed by most victims of the deadly opioid crisis(Kornfield et al., 2020). The creators of OxyContin have faced criticism from activists, families, and victims of the crisis, who have been at the forefront of ensuring its demise. However, this filing of Chapter 11 turned out to be a move by the company’s top management to evade justice and deliberately evade accountability. The company filed for voluntary bankruptcy, and through this, it shielded itself from thousands of lawsuits emanating from both state and federal governments. The 2,600 cases resulted from its role in flooding the United States with the opioid. The filing of bankruptcy invoked a direct stay of civil litigation against Purdue Pharma, and the owners also had to cope with the repercussions of the victims of opioid addiction. Those who lost their loved ones to the crisis also had the right to file claims of wrongful demises and ‘individual injury’ as creditors in the bankruptcy settlement. States refused the provisions proposed in the August 2019 Settlement.
Further Agreements and Pledges
The Pharma agrees to cooperate with DoJ in the continuing investigations and any leading prosecutions appertaining to the investigation by the DoJ across the states in the US. Its ongoing cooperation would include disclosing all relevant information about individuals involved in the misconduct, voluntarily disclosing other wrongdoings identified by the company, making available witnesses for interviews, and providing the DoJ with relevant documents and evidence. The DoJ would determine the relevance of the discretion by the company. The DoJ agrees to credit against the forfeit judgment amounting to $2 billion as a way of avoiding the imposition of double penalties and fines.
Reference
Kornfield, M., Rowland, B., Bernstein, L. & Barrett, D. (2020). Purdue Pharma agrees to plead guilty to federal criminal charges in settlement over opioid crisis. Washington Post.