Purdue Pharma Faces Sentencing in Criminal Opioids Case, Paving the Way for Settlement Distribution

A judge is set to impose a $225 million forfeiture on Purdue Pharma, the maker of OxyContin, directing the funds to the Justice Department. This decision, expected on Tuesday, is a crucial step toward resolving the multitude of lawsuits Purdue faces due to its involvement in the opioid epidemic.

This financial penalty is part of a 2020 agreement aimed at settling federal civil and criminal investigations against the company. If the judge gives the green light, other penalties might be waived as Purdue moves to resolve the outstanding lawsuits.

Following complex legal proceedings, a separate judge approved the settlement last year, which could be implemented as early as May 1. This agreement obligates the Sackler family, owners of Purdue, to pay up to $7 billion to various claimants, including state, local, and Native American tribal governments, as well as individual victims.

Here’s an overview of the ongoing situation.

The sentence was years in the making

In November 2020, Purdue Pharma pleaded guilty to three federal criminal charges.

The company, based in Stamford, Connecticut, acknowledged that it failed to maintain an effective program to prevent its potent prescription painkillers from being diverted to illegal markets, despite previous assurances to the U.S. Drug Enforcement Administration that such measures were in place.

It also admitted that it paid doctors through a speakers program to prescribe the drugs and paid an electronic medical records company to send doctors information on patients that encouraged more opioid prescriptions.

While Purdue produced only a fraction of the opioid pills that flooded the market in the 2000s, advocates have long seen aggressive sales of OxyContin as one of the touchstones of the crisis. At a 1996 event to rally Purdue’s sales force, Richard Sackler, then a top Purdue executive and later president of the company, called for a “blizzard of prescriptions.”

While Purdue is expected to pay $225 million, the government agreed in the plea deal not to collect $5.3 billion in criminal forfeitures and fines and $2.8 billion in civil liabilities. Instead, portions of that money are considered part of the broader settlement – and the federal government will receive a small slice of that.

Up to $7 billion from Sackler family members

The broader settlement calls for members of the Sackler family who own the company to contribute up to $7 billion over 15 years. Most of the money is to go to government entities to use to fight the opioid crisis.

It’s among the largest in a series of settlements by drugmakers, wholesalers and pharmacies in recent years – and the only major one that includes payments for some individual victims or their survivors.

Together, the settlements are worth more than $50 billion, and most of the money is to be used to address the overdose epidemic.

Under the Purdue deal, members of the Sackler family would be shielded from lawsuits over opioids from those who agree to the payments.

Purdue itself would cease to exist and be replaced by a new company, Knoa Pharma, which would operate for the public benefit and have a board appointed by the states.

The reorganization is considered one of the most complicated ever. By the end of last year, Purdue had paid law firms and other professionals working on all sides of the case more than $1 billion, according to a court filing.

The sentencing doesn’t include the company’s owners

Members of the Sackler family have long been cast as villains in the opioid crisis, seeking to increase profits even as it became clear people were becoming addicted to OxyContin and overdosing.

But no members of the family were charged.

Family members received $10.7 billion in payments from Purdue from 2008 to 2018. They have not been paid by the company since 2018 – and the last of them left Purdue’s board in 2019.

Under the settlement, they would not object if their names are removed from museums and other institutions they’ve supported – something that’s already been happening.

Some victims are pushing for prosecutions

More than 54,000 people with personal injury claims against Purdue voted to accept the settlement, and 218 voted against it.

Still, some victims and their family members have been pushing back for years, asserting that the settlement and the guilty plea stop short of justice for victims of a crisis that has been linked to 900,000 deaths in the U.S. since 1999.

Tuesday’s sentencing is one more chance for them to make that case to a judge.

Susan Ousterman’s son, Tyler Cordiero, died at age 24 in 2020 after overdosing on a mixture that included fentanyl after years of using heroin and other opioids. She organized others who lost loved ones to deliver victim impact statements to the court ahead of the sentencing.

She said the aim was to persuade the judge to reject the plea deal and for the U.S. Justice Department to pursue criminal charges against individuals, including Sackler family members.

“It shouldn’t be going to states and municipalities,” said Ousterman, noting some governments have not yet used the funds they’re received and others have used it in ways not closely linked to fighting the drug crisis. “They’re not using that money effectively.”