On October 21, 2020, Purdue Pharma pled guilty to three criminal charges as part of their $8 billion settlement surrounding the drug OxyContin, a drug that Purdue produced. The charges included: one count of conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Anti-Kickback Statute. OxyContin was one of the highly addictive opioids that has been blamed for starting the national opioid epidemic, which has been linked to over 470,000 deaths in the United States in the past twenty years.
In addition to admitting that Purdue purposefully impeded the Drug Enforcement Administration, Purdue also admitted to violating the Anti-Kickback Statute. The Anti-Kickback Statute prohibits any physician or other individual from knowingly offering, paying, or soliciting remuneration to induce business payable by Medicare or Medicaid. Through a misleading program, Purdue induced physicians with payments to write more OxyContin prescriptions. Purdue also induced physicians to utilize an electronic health record that would influence the prescription of pain medicine, especially OxyContin.
In addition to admission of the above criminal charges, Purdue also entered a civil settlement with the government. The settlement will resolve the allegation that Purdue caused false claims to be submitted to government programs, in violation of the False Claims Act. It also civilly resolved Anti-Kickback Statute violations.
As a result of the settlement, Purdue will owe around $8 billion in fines, forfeitures, and civil liability to the government. This is the largest penalty ever imposed on a pharmaceutical company. It is anticipated, however, that not all of the money owed will be collected due to Purdue filing for bankruptcy as a result of this settlement. Another outcome of this settlement is that Purdue will be turned into a public benefit company after the bankruptcy proceedings. Many states have pending suits against Purdue, so there are a significant number of creditors who may collect during bankruptcy. Changing Purdue into a public benefit company would force Purdue to be governed by a trust and be held accountable by the public.
This civil settlement and criminal pleas comport with recent efforts by the government to combat the national opioid epidemic. The CDC tracks the beginning of the epidemic to 1999, wherein prescription opioids began the epidemic. In the years following, heroin and other synthetic opioid usage rose—but prescription opioids, such as OxyContin, were among the first.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters. If you or your healthcare entity has any questions pertaining to the False Claims Act, the Anti-Kickback Statute, or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.