Purdue Pharma Dissolves After Final Criminal Sentencing
Finn's Take· TL;DR- Purdue Pharma dissolved after criminal sentencing, settling 900,000+ opioid deaths with $50+ billion total settlement payments.
- Sackler family contributes up to $7 billion over 15 years; individual victims receive $8,000-$16,000, though documentation barriers exist.
- Purdue replaced by Knoa Pharma focused on combating opioid crisis; internal documents released publicly to support accountability efforts.
End of an Era for OxyContin Maker
Purdue Pharma, the maker of OxyContin, is set to be dissolved and replaced by a company focused on the public good by the week's end, as a massive legal settlement resolving thousands of lawsuits takes effect. A federal judge on Tuesday delivered a criminal sentence to the company to resolve a U.S. Department of Justice probe — a last necessary step to clear the way for the settlement.
It's a long-awaited decision for thousands of families impacted by the opioid crisis, which has been linked to an estimated 900,000-plus deaths since 1999. "It is not lost on me that those who started the epidemic will not serve a sentence," she said. Steve Miller, who became chairman of Purdue's board to guide the company through the bankruptcy process and will cease to have that position when the company is dissolved, addressed the hearing: "I deeply apologize on behalf of the company for everything they did," he said.
The Stamford, Connecticut-based company admitted it did not have an effective program to keep its powerful prescription painkillers from being diverted to the black market, even though it told the U.S. Drug Enforcement Administration that it did. It also admitted 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.
Massive Settlement Details
The guilty plea and civil settlement with the federal government included $8.3 billion in forfeitures, fines and penalties. But the federal government agreed in a negotiated settlement to collect just $225 million in exchange for Purdue reaching a separate settlement on the thousands of lawsuits it faced from state, local and Native American tribal governments, along with other groups.
The settlement, which Purdue says could take effect as soon as Friday, 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. Under the Purdue deal, members of the Sackler family will be shielded from lawsuits over opioids from those who agree to the payments.
Payments to individual victims are expected to range from about $8,000 to about $16,000. Overall, the settlements are worth more than $50 billion, and most of the money is to be used to address the overdose epidemic. However, Alexis Pluis, an upstate New York mother who lost a son to opioids in 2014, said she doesn't expect to receive anything from the settlement because she can't locate 23-year-old medical records showing her son was prescribed OxyContin.
Victims Speak Out
U.S. District Judge Madeline Cox Arleo on Tuesday heard in person and by teleconference from people impacted by opioids in several ways: mothers who lost sons to overdose, a teenager born into withdrawal and whose mother later died, and people who were prescribed OxyContin after accidents and spent years dealing with addiction treatment and financial and emotional turmoil.
Michele Wagner, whose son died of an overdose, said outside the courthouse last week that she wanted to see Sackler family members who own Purdue criminally charged. "Justice to me looks like more than just money," she said. More than 54,000 people with personal injury claims voted to accept the settlement; around 200 said no.
"There's no words to describe how hard this loss has been," Tiffineee Baker said, adding her 26-year-old son died of fentanyl poisoning after getting addicted to OxyContin. "Because of OxyContin, that led to heroin and fentanyl," one protester said.
New Company Emerges
As part of the settlement, Purdue itself will cease to exist and be replaced by a new company, Knoa Pharma, with a board appointed by the states and an aim of combating the opioid crisis. Millions of internal Purdue documents are to be made public. Members of the Sackler family also have agreed not to object if their names are taken off museums and other institutions they've supported.
The transformation from Purdue to Knoa represents a rare corporate dissolution tied to public health accountability. While critics argue the settlement doesn't go far enough in holding executives personally responsible, the