Exclusive: OxyContin maker Purdue nears guilty plea agreement in U.S. criminal probe - sources
By Mike Spector and Jessica DiNapoli
NEW YORK (Reuters) - Purdue Pharma LP, the OxyContin maker controlled by members of the affluent Sackler family, is nearing an agreement to plead guilty under a broader agreement to support the U.S. Department of Justice's investigation into its purported role in refueling to resolve the nation's opioid crisis, said six people familiar with the matter.
Purdue attorneys and prosecutors broker a plea deal that could be revealed as early as the next two weeks and could involve billions of dollars in fines, four respondents said. They stressed that the conversations are fluid and that some of the terms may change as the discussions progressed.
In addition to criminal proceedings, US attorneys are negotiating a civil lawsuit, including fined, for illegal conduct in Purdue's use of prescription pain medication.
The Stamford, Connecticut-based company is expected to face fines of more than $ 8 billion. They consist of a fine of roughly $ 3.54 billion, a forfeiture of $ 2 billion and a civil fine of $ 2.8 billion, some of the people familiar with the negotiations said.
They are unlikely to be paid in the short term as the fine and civil penalty are likely to be included in Purdue's bankruptcy proceedings along with other claims and the company lacks the funds to repay all of its creditors in full.
The preliminary agreement would put a line under Purdue's criminal exposure to what prosecutors and attorneys general have described as aggressively marketing an addictive pain reliever that minimizes the drug's potential for abuse and overdose.
Over the years, Purdue has made billions in profits on its opioids, enriching the Sackler family members, and relaying illegal setbacks to doctors and pharmacies, prosecutors and attorneys general. The company is now facing thousands of lawsuits seeking damages to address a public health crisis that has plagued US communities.
Purdue said it was cooperating with the investigation and discussion to resolve it, but declined to comment. Representatives of Sackler family members who controlled Purdue had no immediate comment or did not immediately respond to a request for comment. They have denied allegations that they contributed to the opioid crisis.
A Justice Department spokeswoman said she generally did not comment on an investigation or settlement meeting, but added that Reuters' understanding of the situation "contains inaccuracies and is highly misleading" without further elaboration.
The Justice Department stands ready to forego a large portion of its $ 2 billion forfeiture claim as long as Purdue meets certain conditions. The first is that Purdue is channeling substantial funds to US communities to fight the opioid epidemic, which they are suing about the crisis, two people said. The other is to get court approval for a reorganization plan that will turn it into a "not for profit" run on behalf of these communities and no longer controlled by the Sacklers.
Purdue, which filed for bankruptcy protection last year and faced an onslaught of litigation, is in talks to plead guilty of conspiracies, violations of a backlash law, and misbranding under the Food, Drug and Cosmetic Act, among other things. A plea agreement would require the approval of the Purdue bankruptcy judge. One of the negotiated terms of Purdue's proposal to resolve thousands of other opioid lawsuits is to resolve the Justice Department's investigation.
SACKLERS WHO ARE NOT STANDING FINE FEES
Members of the Sackler family, many of whom previously served on Purdue's board of directors and are also on trial, will avoid criminal charges in the threatened settlement, the two people said.
Certain family members are in talks to pay a civil penalty of around $ 225 million for allegedly submitting false claims regarding Purdue's prescription pain medication to state health programs, three people said. That would be on top of the $ 3 billion the Sacklers offered to settle other lawsuits.
The agreement currently under discussion does not regulate any future criminal liability to which Sacklers or any other person could be exposed.
The Justice Department is continuing a criminal investigation into some Sackler family members and other Purdue related individuals, although it remains unclear whether charges will be brought, one person said.
Details of the Justice Department's deal, including timing of the disclosure and financial sanctions, also remain in flux. They depend in part on the outcome of separate negotiations between Purdue, the Sacklers, attorneys general, and others to resolve widespread mediation litigation in the company's bankruptcy, according to the people familiar with the talks.
Some attorneys general, including those in Massachusetts and New York, have required the Sacklers to disclose additional details of their finances and pay more than the $ 3 billion they offered to settle legal disputes.
You will likely question the level of the family Justice Department's sentence. The Sacklers stand ready to receive legal release in the event a bankruptcy judge approves a broader settlement and protects them from future civil, if not criminal, claims.
Purdue's bankruptcy has protected the Sackler company and family members from thousands of lawsuits filed by states, cities, counties and other individuals for allegedly flooding communities with opioid through at least March 2021, with an injunction Blaming pain relievers that contributed to widespread addiction and fatal overdoses. The company and the family deny the allegations.
The Sacklers, who control Purdue themselves, have not filed for bankruptcy. That has drawn criticism from states arguing that litigation against family members should hold them accountable for the opioid crisis.
The outcome of the settlement talks between Purdue, its owners and litigants will help determine how much money US communities are getting to fight the opioid toll.
In previous filings filed as part of Purdue's bankruptcy proceedings, prosecutors said the company intermittently paid doctors and pharmacies illegal setbacks between 2010 and 2018 to encourage medically unnecessary opioid prescriptions, leading to fraudulent claims on government health programs like Medicare .
Purdue has offered to resolve widespread legal disputes valued at more than $ 10 billion. Much of this has to do with drugs under development to treat addiction and control overdoses. A controversial aspect of the proposal is that some of the funding would come from continued OxyContin sales.
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