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A federal judge on Tuesday approved a criminal sentence for Purdue Pharma tied to a broad settlement that resolves thousands of lawsuits over OxyContin, clearing the way for the company’s dissolution and replacement by a new opioid-focused firm. U.S. District Judge Madeline Cox Arleo also received hours of impact statements from people who said they lost loved ones to opioids, suffered addiction, or saw their lives upended after being prescribed OxyContin. While she did not reject the negotiated sentence, she said she sympathized with those who bore the brunt of an epidemic linked to more than 900,000 deaths in the United States since 1999.
The judge delivered the sentence as a “last necessary step” connected to the company’s deal with the U.S. Department of Justice, according to the Associated Press. Arleo said she found the conduct “a purposeful, intentional and sophisticated crime scheme,” after hearing the presentations and arguments in federal court in Newark, New Jersey. She also told those gathered that she would keep photos of loved ones they had lost to opioids in her chambers while she serves as a judge.
The court also heard from people whose testimony sought to convince the judge to reject the negotiated punishment. Among them was Alexis Pluis, an upstate New York mother who lost a son to opioids in 2014, who told the court she did not expect to receive any money from the settlement because she could not locate medical records showing her son was prescribed OxyContin. Pluis said, “We still deserve justice,” and added, “And this isn’t it.”
The settlement’s structure, as described in court, includes a combination of criminal resolution and civil terms tied to government oversight and broader opioid litigation. Purdue, which reached an agreement with the Justice Department in 2020 to resolve criminal and civil probes, admitted it lacked an effective program to prevent its prescription painkillers from being diverted to the black market even though it told the U.S. Drug Enforcement Administration that it had such a program. The company 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 in a way that encouraged more opioid prescriptions.
The plea and civil settlement with the federal government included $8.3 billion in forfeitures, fines, and penalties, while the government agreed in a negotiated settlement to collect $225 million, the report said. The deal also required Purdue to resolve thousands of lawsuits with state, local, and Native American tribal governments, along with other groups, and the guilty plea did not include restitution to victims. The broader settlement had followed years of legal turns, after a bankruptcy judge in November approved the wider sentence.
Arleo also addressed why the settlement allowed the Sackler family members who owned Purdue to pay over 15 years rather than immediately, asking lawyers early in Tuesday’s hearing about the timeline. The lawyers said it was because the family members had to sell other businesses to secure the cash, while the judge offered a different explanation: “They’d rather pay it from future money than pay it now,” she said. The judge also criticized how federal authorities handled the OxyContin epidemic, and prosecutors for not bringing charges, saying federal prosecutors routinely highlighted the role of an epidemic in cases involving convicted drug dealers.
Purdue’s chairman during its bankruptcy process, Steve Miller, addressed the hearing, offering a company-level apology. “I deeply apologize on behalf of the company for everything they did,” Miller said, and the report noted that only the company was charged, not individual employees or owners. The settlement described in Tuesday’s proceeding is expected to take effect as soon as Friday, the report said.
Payments to individual victims under the terms outlined in court were expected to range from about $8,000 to about $16,000, according to the Associated Press. Some people in Tuesday’s hearing said they might be rejected for those payments because they could not locate decades-old prescriptions. Arleo told Purdue bankruptcy lawyers to ensure there were additional ways for claimants to prove they were harmed.
As part of the settlement and dissolution process, Purdue itself would 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. The settlement also said millions of internal Purdue documents would be made public. Separately, the report said the Sackler family also agreed not to object if their names are removed from museums and other institutions they supported. As covered earlier in the lead-up to Tuesday’s decision, the sentencing was delayed so opioid victims could attend the proceedings. MSI previously reported the delay arrangement ahead of the court’s final ruling.
Finally, the settlement called for Sackler family members to contribute up to $7 billion over 15 years, with most of the money going to government entities to fight the opioid crisis. The report said overall, settlements among drugmakers, wholesalers, and pharmacies in recent years are worth more than $50 billion and that Purdue’s settlement is among the largest in that series, with terms that include payments for some individual victims or their survivors.