Purdue Pharma Settles With U.S. DOJ Over Opioid Probes

Key Takeaways

  • OxyContin maker Purdue Pharma has settled with the U.S. DOJ
  • However, the company has insufficient assets to pay the full amount
  • Numerous state and local government suits still proceed
  • The Sackler family is under scrutiny for massive withdrawals

Purdue Pharma LP has reached an $8.34 billion settlement with the U.S. Department of Justice (DOJ) to put an end to lengthy criminal and civil federal probes into its marketing and distribution practices regarding opioid painkillers, notably its OxyContin product. However, since the privately owned company has assets far below $8 billion, the settlement may be largely symbolic, although the controlling Sackler family will pay $225 million to resolve civil suits.

Purdue sought bankruptcy protection in Sept. 2019, as the result of thousands of lawsuits filed by state and local governments claiming that its aggressive marketing of OxyContin has led to widespread opioid abuse, addiction, and fatal overdoses. Such lawsuits by state and local governments, as well as Native American tribes, are not halted by the deal between Purdue and the DOJ. Rather, it is widely believed that the DOJ will not enforce its full claim so that these other entities might collect on theirs instead.

While Purdue pled guilty to three counts as part of the settlement, including counts related to payments it made to health care providers, its owners and employees may be subject to future prosecutions.

What's Left For Claims

The total value of the assets in Purdue's bankruptcy estate is estimated to be around $5 billion, including $3 billion pledged by the Sackler family. Some states are pressing for the Sacklers to contribute more, and are seeking a fuller picture of their net worth. Court documents indicate that the Sacklers withdrew $10.7 billion from Purdue from 2008 to 2017, as scrutiny of the company's role in the opioid crisis grew, in addition to $1.3 billion that they took out of the company from 1995 to 2007.

Details on the Settlement

Deputy U.S. Attorney General Jeffrey A. Rosen offered some remarks on the occasion of the settlement with Purdue Pharma. He said, in part: "[W]e have targeted unlawful activity involving opioids at every level of the supply chains...today’s announcement involves one of the most important participants in the supply chain of prescription opioids, at the manufacturer level."

The three felony counts to which Purdue pled guilty involve defrauding the United States and violating the Anti-Kickback Statute from 2009 to 2017. The $8.34 billion settlement includes a $3.544 billion criminal fine, a $2 billion criminal forfeiture amount, and $2.8 billion in damages to resolve its civil liability to the U.S. federal government.

The Future of Purdue Pharma

The DOJ supports turning Purdue into a public benefit company (PBC), owned by a trust, that "would be charged with providing its medicines in a manner as safe as possible, without diversions, while providing millions of doses of medicines to treat opioids addiction and reverse overdoses and otherwise taking into account long-term public health interests." Moreover, the Sacklers would have no hand in its creation or management, as well as no ownership interest.

However, 25 states have written a letter to U.S. Attorney General William Barr opposing such a restructuring. They prefer a sale of the company to a private buyer, partly because this “may also deliver more upfront money that cities and states can use to abate the opioid epidemic.”

Article Sources
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  1. The Wall Street Journal. "Purdue Pharma Reaches $8.34 Billion Settlement Over Opioid Probes,"

  2. The Wall Street Journal. "OxyContin Maker Purdue Pharma Files for Bankruptcy Protection,"

  3. Forbes. "Sacklers Withdrew Over $12 Billion Over 13 Years From Purdue Pharma As The Opioid Epidemic Grew,"

  4. U.S. Department of Justice. "Remarks by Deputy Attorney General Jeffrey A. Rosen on the Resolution of Civil and Criminal Investigations into Purdue Pharma and the Sackler Family,"

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