By Dietrich Knauth
NEW YORK, April 28 (Reuters) – Purdue Pharma will be sentenced on Tuesday in New Jersey federal court for deceiving government regulators and paying kickbacks to doctors to boost opioid sales, completing 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.
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 U.S. District Judge Madeline Cox Arleo postponed the hearing to allow greater public 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.
“We recognize the importance of ensuring that victims can be heard, and we respect the court’s decision,” Purdue said in a statement ahead of Tuesday’s hearing.
Several victims of the opioid crisis sent letters to the court with personal stories of suffering, loss and addiction, some of them urging the judge to reject the plea deal and insist on prison time for the company’s executives and its owners.
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.
Arleo is expected to accept Purdue’s plea deal at Tuesday’s hearing in Newark, New Jersey, imposing a $3.5 billion criminal fine and $2 billion in criminal forfeiture.
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.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Lincoln Feast.)
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