Incomplete Opioids Punishment
Terry H. Schwadron
Oct. 24, 2020
Okay, the U.S. Justice Department got Purdue Pharma, makers of OxyContin, to plead guilty in a deal that will seek $8.3 billion to federal and state opioid treatment programs, assess the owning Sackler family $225 million in civil penalties, allow criminal investigations to continue, and to basically seek to wrap up the case just before Election Day.
Only, there are no criminal charges against the Sacklers, who took $10 billion out of the business last year, or their executives, who continue getting bonuses this year, and the $8 billion may or not ever get paid, depending on whether a bankruptcy judge allows Purdue to reorganize itself financially and legally.
The company will go on producing opioids, addiction rates continue to soar, chastened medical systems have become a little more aware to curb prescriptions. And Purdue actually has contributed political money towards attorneys general who are doubling down on further state prosecution efforts.
Talk about building trust in our systems.
It was intended to be a “global settlement” of all outstanding criminal and civil actions involving guilty pleas to three felony counts for defrauding the United States and violating the Anti-Kickback Statute from 2009 to 2017. Purdue will argue in future proceedings that this settlement should wipe out thousands of lawsuits brought against the company for its role in a public health crisis that has killed more than 450,000 Americans since 1999.
In case you were wondering, Steve Miller, chairman of Purdue board, said: “Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts.” But the owning family said they had acted ethically and lawfully throughout.
Pretty rich for a company and industry leader that repeatedly and consistency ignored even its own data about producing and selling more and more of addictive narcotics.
Hmm. Maybe Joaquin “El Chapo” Guzman should have had the Purdue lawyers working for him.
Payment in Full Unlikely
It seems that everyone but Justice thinks it is unlikely because of its bankruptcy court filings, that Purdue will pay anything close to the $8.3 billion negotiated. Indeed, if approved, the feds will have to join a long line of creditors asking for pennies on every dollar. The government said it was requiring forfeited sales revenue of about $2 billion, with most going to states.
Maybe it gives Donald Trump something to trumpet in the waning days of campaigning, but state attorneys general are raising questions about holding the Sackler family, worth a reported $13 billion, to account. The New York Times noted that Purdue wanted to settle its federal legal troubles under a Trump administration rather than a new one.
Cases against other opioid makers and distributors are still live. Purdue wanted the federal case done before turning to claims from cities, tribes, states and individuals.
Basically, Purdue is admitting what we have believed all along, that it misled, paid and hoodwinked doctors and distributors to boost sales.
Purdue wants — and the Justice Department said yes — to continuing running the company as a “public benefit corporation,” with proceeds from continuing limited sales of OxyContin to go toward opioid abatement. States think that is nuts.
It’s messy and complicated, but the simple explanation is that a rich Sackler family will be just fine and far from jail, victim families won’t ever be fine, cities and states will be forever paying off the costs of treatment programs, the medical establishment remains unabashed, if more careful, about heavy prescription usage, and Trump can claim that he did something about opioids.
Individuals who have suffered from opioid addiction or lost family members have until next July to file claims of wrongful death and “personal injury” as creditors in the bankruptcy settlement. Many will want transparency that this settlement will help cloak. Buried in all this are company documents that show the details of how Purdue’s schemes ran.
What Constitutes Justice?
We still could expect Congress, particularly if Democrats win the elections, to force hearings on these charges. it was Congress, after all, not the courts, that forced tobacco executives to testify under oath. Victims want owning families to acknowledge the breadth and depth of their wrongdoing — even if they don’t go to jail.
The Intercept reported that while all these negotiations were underway the Democratic Attorneys General Association accepted $25,000 in donations from Purdue and the Republicans $60,000, according to data collected by Political MoneyLine.
Purdue’s filing for chapter 11 bankruptcy would recognize that the Sackler family could walk away from a pledge to give $3 billion from their personal wealth and the company into a trust committed to curbing and reversing overdoses. Basically, the family is saying that if a judge does not halt lawsuits from states, they will pull their commitment.
And Purdue requested permission to pay $34 million in bonuses to select employees, The Washington Post reported.
Who says capitalism is dead?