Purdue Pharma to Pay $8.3B for Crimes, but Execs Not Held Accountable

Purdue Pharma admits responsibility in contributing to the American opioid epidemic and agrees to pay a $8.3 billion fine to the Department of Justice. The company pleaded guilty on three felony accounts: one charge for defrauding the United States and two anti-kickback charges. In addition, the Sackler family will pay $225 million in civil fines. Since 1999, nearly half a million lives have been lost to opioid overdoses and the economic cost to the country has been $500 billion. 

The settlement does not preclude criminal prosecution of individual company executives or members of the Sackler family. New York Attorney General Letitia James said, "We are committed to holding the Sacklers and others responsible for the role they played in fueling the opioid crisis." 

Some say the settlement is only symbolic though as the company is facing bankruptcy and that more needs to be done in holding executives accountable. Purdue Pharma executives and the Sackler family are only a handful of people responsible for the epidemic. 

"The DOJ failed," said Massachusetts Attorney General Maura Healey. "Justice in this case requires exposing the truth and holding the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long."

On August 31 of this year, The FED UP! Coalition for opioid victim survivors, along with dozens of other groups, petitioned the US Attorney General William P. Barr to take action and criminally prosecute the industry executives responsible for the opioid crisis, not limiting opioid manufacturers, but including distributors such as AmerisourceBergen and Cardinal Health, among other companies. 

Historically, opioid manufacturers such as Purdue, Johnson & Johnson, Endo Pharmaceuticals, Mallinckrodt Pharmaceuticals, McKesson and Cephalon have paid fines in the hundreds of millions for culpability in the epidemic, but it doesn’t bring justice for the victims or their loved ones.

Despite such large fines, including Purdue’s recent $8.3 billion resolution, industry executives who are responsible for the crimes are rarely charged criminally (Public Citizen), the exception being John Kapoor, founder and former CEO of Insys, who was sentenced to 5 and a half years for criminal racketeering in his marketing of Subsys, a narcotic fentanyl spray in January of 2019.

This year, the CDC reported more than 71,000 overdoses in 2019, the highest toll yet, which was primarily attributed to fentanyl and similar synthetic opioids, accounting for more than half. With the COVID-19 pandemic underway, it’s estimated that figure will only rise for 2020. Over the past two decades, opioid addiction has trended from hydrocodone to more potent forms such as heroin and fentanyl. As potency increases and prices fall for these powerful opioids on the black market, overdose deaths statistically also increase. 

Physician and public health advocate Dr. Andrew Kolodny, who also sits on the board of FedUp! said, “We believe that regulating the industry is part of the solution, and the other part would be changing corporate behavior by holding executives responsible for the actions that they took that cost lives. For the millions that are addicted, that's not going to help them. They need really good access to effective addiction treatment.”

Last year, Teva Pharmaceutical Industries, the world’s largest generic drug maker, pledged to pay $250 million in cash, but over a decade. The agreement also stated that the company would not admit liability in the opioid epidemic but would donate approximately $23 billion worth of their drug used to treat opioid dependence: Buprenorphine naloxone, also sold under the brand name Suboxone. The favorable deal led to the company’s stock to rise 50% since then. 

Kolodny, who helped create the petition for US Attorney General Barr, said, “What's happened over the years is that we've seen repeatedly manufacturers and distributors of opioids break the law, get into trouble and pay fines. There should be justice for the victims, it's a part of what our legal justice system is designed for and now we’re finally asking for it.”

Bruce Boise, former sales manager for Cephalon (now Teva) turned whistleblower against the company, explained how the company’s orphan drug illegally became a billion dollar product in the industry.

“In 2002, Actiq, a fentanyl opioid lollipop, was purchased by Cephalon and indicated only for cancer patients, the kind in hospice care and who were already drug tolerant,” said Boise. “Once Cephalon saturated that small market, it looked to create a new and bigger market, by going “off-label,” with migraine or back pain patients, for example. We turned a $16 million product into a $400 million one in just a few years. By the time they were fined for the criminal activity, they’d made billions.”

In a company press release, Actiq was coined as one of the fastest growing drugs in Cephalon’s product portfolio. A couple years prior to Boise’s case concluding in 2008 with a $425 million dollar fine, the FDA approved Fentora, an effervescent lozenge that was twice the bioavailability of Actiq. 

“Looking back we know the fine was just a cost of doing business,” said Boise. “Right after the case settled, Cephalon did a switch campaign. They did not stop the criminal behavior of going off-label to market their products — including with Fentora.”

“In fact, sales reps were paid more for selling higher doses of fentanyl,” he said. “At the launch of Fentora, five migraine patients overdosed. That’s when I was asked by the DOJ to file a second case in 2008.”

After Boise filed, Teva bought Cephalon in 2011 and Fentora was dismissed from the case in 2015 by the federal court for the Eastern District of Pennsylvania. In May 2019, however, Teva agreed to pay a $85 million fine to Oklahoma for its illegal promotion of both Actiq and Fentora. To date, no Cephalon/Teva executive has been prosecuted for his contribution to the national health crisis of opioid addiction and overdose. 

While the recent resolution against Purdue Pharma has yet to include the criminal prosecution of individuals responsible, it might assist in the settlement of thousands of other lawsuits against the company for the opioid epidemic. It could also open the door to bigger fines for other pharma companies. 

Deputy Attorney General Jeffrey A. Rosen said, “[...] the resolution in today's announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis."

The American people have yet to see what that “multi-pronged” strategy would entail and if that includes jail time for culpable individuals in the industry. 

Read about Bruce Boise’s undercover work in his book Cold Comfort.

Altered image in post from Wikimedia.