Purdue Pharma appeared in New Jersey federal court on Tuesday for sentencing on charges of deceiving government regulators and paying kickbacks to doctors to boost opioid sales.
The sentencing will complete a plea deal that clears the way for the company to dissolve in bankruptcy and use its assets to fund a $7.4 billion settlement intended to compensate people harmed by the opioid epidemic.
U.S. District Judge Madeline Cox Arleo in Newark, New Jersey, said she was inclined to accept the plea deal but first wanted to hear from victims of the opioid crisis. Several victims sent letters to the court with personal stories of suffering, loss and addiction, and more than 30 were scheduled to speak in court.
Alexis Pleus, whose son Jeff died after he took opioids for a football injury and became addicted, told Arleo that justice would not be served by the settlement.
“The punishment does not fit the crime, and we ask you to reject this plea,” Pleus said.
The company agreed to $5.5 billion in criminal fines, most of which will go unpaid under a 2020 agreement with the U.S. Department of Justice in which the agency will collect just $225 million. That deal allows Purdue to direct its remaining assets to repaying creditors, mostly state and local governments, which were left to deal with the cost and consequences of the opioid crisis in their communities.
Purdue had been scheduled to be sentenced last week, but Arleo postponed the hearing to allow greater participation from people who wanted to speak up about the company’s marketing of its painkiller OxyContin and its role in fueling the opioid epidemic in the United States.
Purdue’s lawyer, Eli Vonnegut, said in court on Tuesday that the settlement fulfills the promises Purdue made in the bankruptcy litigation, even if victims of the opioid crisis are owed far more than the company can pay.
“We understand the frustration that many have with the bankruptcy process,” he said.
COMING TO A CLOSE
The sentencing comes as people harmed by opioids say the company’s long‑running bankruptcy has left them frustrated. The $7.4 billion settlement, which includes an $865 million fund for individuals affected by the crisis, has been hailed by Purdue and plaintiffs’ lawyers as a victory for victims, but a recent Reuters examination shows how the process has created daunting hurdles for many people seeking compensation.
Purdue’s bankruptcy case is coming to a close after more than six years in court, following a lengthy series of appeals which went all the way to the U.S. Supreme Court.
The sentencing is one of the final hurdles before the bankruptcy settlement can proceed. Purdue said it remains on track to emerge from bankruptcy on May 1, ceasing its previous operations and emerging as a new nonprofit company that will make opioid addiction treatment and overdose-reversal medicines.
As part of the plea agreement, Purdue admitted to paying kickbacks to doctors to fuel OxyContin sales and to deceiving federal regulators about its efforts to prevent illegal drug use. No company executive or owner was charged as part of the latest criminal case.
The company previously pleaded guilty to misbranding and fraud charges related to its marketing of OxyContin in 2007, admitting it falsely marketed OxyContin as less addictive, less subject to abuse, and less likely to cause withdrawal symptoms than rival pain medications.
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