December 04, 2020

OxyContin Maker, Purdue Pharma LP, Pleads Guilty to Criminal Charges

On November 24, Purdue Pharma LP (“Purdue”) pled guilty to three felonies related to the company’s handling of OxyContin. The criminal charges were related to Anti-Kickback Statute and Food, Drug, and Cosmetic Act violations. Per the terms of the agreement, Purdue will pay the largest penalties on record against a pharmaceutical manufacturer, including a criminal fine of $3.54 billion and an additional $2 billion in criminal forfeiture. Additionally, Purdue agreed to a civil settlement of $2.8 billion to resolve civil liabilities under the False Claims Act. On Nov. 17, a bankruptcy court approved a global resolution with Purdue. The resolution requires Purdue to restructure the company as a public benefit company (PBC) with profits generated from the PBC directed to state and local opioid abatement programs.

However, the resolution does not resolve claims that states may have against Purdue or it’s owners, nor does it inhibit other debtors’ or other third parties’ ability to recover any fraudulent transfers. In addition, opponents of the deal argue that states will be placed in a financial relationship with Purdue, a company that has devastated their communities with dangerous opioids. United States Bankruptcy Judge Robert Drain, Southern District of New York, rejected such arguments, finding that once the company is organized into a public benefit corporation, it would generate significant revenue to ‘alleviate and abate’ the opioid crisis.