Oxycontin maker Purdue Pharma has pleaded guilty to three federal criminal charges as part of its $8.3 billion plea deal for its role in fueling America’s opioid crisis.
The Connecticut-based pharmaceutical giant, owned by the wealthy Sackler family, entered guilty pleas Tuesday to charges including conspiracy to defraud the US and violating federal anti-kickback laws.
The pleas were part of Purdue’s settlement with the Department of Justice and see the firm finally formally admitting to its role in an opioid epidemic that has contributed to hundreds of thousands of deaths over the past two decades.
Since OxyContin was introduced back in 1996, opioid addiction and overdoses have surged across America.
In 1999 there were less than 4,000 opioid overdose deaths. By 2018, this figure had risen to 47,000, according to the US Centers for Disease Control and Prevention.
Oxycontin maker Purdue Pharma has pleaded guilty today to three federal criminal charges as part of its $8.3 billion plea deal for its role in fueling America’s opioid crisis
In a virtual hearing with a federal judge in Newark, New Jersey, the OxyContin maker admitted to all three federal charges.
On the conspiracy charge, Purdue admitted that from May 2007 through at least March 2017 it conspired to defraud the US.
This charge relates to Purdue impeding the Drug Enforcement Administration (DEA) by falsely representing that it had maintained an effective program to avoid drug diversion.
Purdue acknowledged that it had not maintained an effective program to prevent prescription drugs from being diverted to the black market, even though it had told the DEA it did have such a program.
Instead the firm was actually continuing to market its opioids to more than 100 healthcare providers, some of which there was reason to believe were diverting the drugs.
Purdue also admitted to providing misleading information to the agency as a way to boost company manufacturing quotas.
The pharma giant also admitted to two counts of violating federal anti-kickback laws.
This included paying two doctors through a speaking program to write more prescriptions for the company’s opioids between June 2009 and March 2017.
The Connecticut-based pharmaceutical giant, owned by the wealthy Sackler family, entered its guilty pleas Tuesday to charges including conspiracy to defraud the US and violating federal anti-kickback laws
HOW IS OXYCONTIN IMPLICATED IN THE US OPIOID CRISIS?
OxyContin is a prescription painkiller produced and sold by Purdue Pharma.
The drug is strong, addictive and was linked to thousands of overdose deaths in 2017.
Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged.
In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the US Centers for Disease Control and Prevention. In 1999, by comparison, there were fewer than 4,000 opioid overdose deaths.
Purdue’s drugs are just a slice of the opioids prescribed, but critics assign a lot of the blame to the company because it developed both the drug and an aggressive marketing strategy.
The kickback charge also relates to an illegal kickback from around April 2016 to December 2016, where Purdue made payments to electronic health records software firm Practice Fusion to influence the prescription of pain medication.
In 2016, Purdue negotiated with Practice Fusion to create a series of alerts in the software to get doctors to increase prescriptions of opioids.
In pleading guilty, the company also admitted to agreeing to pay nearly $1 million to Practice Fusion in exchange for embedding alerts in its software for one year.
The guilty pleas were entered by Purdue board chairperson Steve Miller on behalf of the company.
‘Having our plea accepted in federal court, and taking responsibility for past misconduct, is an essential step to preserve billions of dollars of value’ for the settlement it is pursuing through bankruptcy court, the company said in a statement.
‘We continue to work tirelessly to build additional support for a proposed bankruptcy settlement, which would direct the overwhelming majority of the settlement funds to state, local and tribal governments for the purpose of abating the opioid crisis.’
The pleas were part of a criminal and civil settlement announced last month between the Stamford, Connecticut-based company and the Justice Department.
United States Deputy Attorney General. Jeffrey A. Rosen announced the deal in a press conference in October where he vowed to ‘turn the tide on the opioid crisis ravaging the country’.
The deal includes $8.3 billion in penalties and forfeitures, but the company is on the hook for a direct payment to the federal government of only a fraction of that, $225 million.
It would pay the smaller amount as long as it executes a settlement moving through federal bankruptcy court with state and local governments and other entities suing it over the toll of the opioid epidemic.
Members of the Sackler family have also agreed to pay $225 million to the federal government to settle civil claims.
No criminal charges have been filed against family members, although the deal does not release any of the company’s executives or owners – including the family members – from criminal liability and a criminal investigation is still ongoing.
However, the Sackler family will lose any stake in the pharma giant and the company will be dissolved as it currently stands, with its assets re-purposed into a public company instead.
A judge authorized the bankruptcy settlement in a court hearing in New York last Tuesday.
Purdue’s plea to federal crimes provides only minor comfort for advocates who want to see harsher penalties for the OxyContin maker and its owners.
The ongoing drug overdose crisis, which appears to be growing worse during the coronavirus pandemic, has contributed to the deaths of more than 470,000 Americans over the past two decades, most of those from legal and illicit opioids.
The attorneys general for about half the states opposed the federal settlement, as well as the company’s proposed settlement in bankruptcy court.
The attorneys general and some activists are upset that despite the Sacklers giving up control of the company, the family remains wealthy and its members will not face prison or other individual penalties.
Numbers of opioid overdose deaths have soared since OxyContin hit the market in 1996, from just 3,442 in 1999 to 17,029 in 2017, official figures show
The activists say there’s no difference between the actions of the company and its owners, who also controlled Purdue’s board until the past few years.
Cynthia Munger, whose son is in recovery from opioid addiction after being prescribed OxyContin more than a decade ago as a high school baseball player with a shoulder injury, is among the activists pushing for the Sacklers and other company officials to be charged with crimes.
‘Until we do that and we stop accusing brick and mortar and not individuals, nothing will change,’ she said Munger.
OxyContin was developed by Purdue and hit the shelves back in 2006.
The powerful prescription painkiller promised 12 hours of ‘smooth and sustained pain control’, diminished presence of ‘common opioid-related side effects’, and ‘improved patients’ quality of life, mood, and sleep’, according to a press release at the time.
It was marketed as being less addictive and safer than morphine, leading it to be widely subscribed.
Opioid addiction soon swept the nation with people crushing the tablets and snorting or injecting them after becoming hooked on the highly addictive drug.
Users often turn to cheaper options such as street heroin once hooked.
In 2007, an affiliate of Purdue – Purdue (Frederick) – and three of Purdue’s executives pleaded guilty to ‘misbranding’ Oxycontin – by saying it wasn’t addictive.
Purdue’s top lawyer Howard Udell, former medical director Paul Goldenheim, and then-president Michael Friedman were sentenced to probation agreed to pay fines in addition to the $600 million in fines and other payments made by Purdue Frederick for their actions.
At the time this was one of the largest pharmaceutical settlements in American history.
Purdue introduced an abuse-deterrent form of the drug in 2010 but it continued to be pushed aggressively to doctors, with the drug reaching peak sales of $3 billion that year.
Raymond Sackler pictured with his wife Beverly. Members of the wealthy Sackler family who own the company have also agreed to pay $225 million to the federal government to settle civil claims
The middle Sackler brother Mortimer is pictured. The Sackler family was once listed among the nation’s wealthiest by Forbes magazine
In 2018, more than 200 states, cities, and counties filed lawsuits against the company for the impact OxyContin has had on their communities.
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.
Purdue applied for bankruptcy status in September after approaching a settlement worth $12billion with local governments across the US.
The company is facing around 2,600 separate lawsuits over drug users’ deaths.
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.
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 only 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.’