A judge on Tuesday delayed the criminal sentencing of OxyContin maker Purdue Pharma in order to allow victims to attend the court proceeding in person.
U.S. District Judge Madeline Cox Arleo originally planned to hand down the sentence Tuesday during a court hearing conducted only by videoconferencing. But she said she changed her mind after seeing some victims of the opioid crisis protesting outside her courthouse in Newark, New Jersey. She said they should be allowed to attend in person, too, and moved the hearing to next Tuesday.
When it happens, Arleo is expected to order the company to forfeit $225 million to the Justice Department, clearing the way for the company to finalize a settlement of nearly all of the thousands of lawsuits it faces over its role in the opioid crisis.
The penalty was agreed to in a 2020 pact to resolve federal civil and criminal probes it was facing. If the judge signs off, other penalties will not be collected in return for Purdue settling the other lawsuits.
After years of legal twists and turns, the settlement was approved by another judge last year and Purdue said it could still be effective May 1 if the sentence is given on the scheduled date. The settlement requires members of the Sackler family who own the company to pay up to $7 billion to state, local and Native American tribal governments, some individual victims and others.
A sentence years in the making
Purdue pleaded guilty to three federal criminal charges in November 2020.
The Stamford, Connecticut-based company admitted that it did not have an effective program to keep its powerful prescription painkillers from being diverted to the black market, even though it told the U.S. Drug Enforcement Administration that it did.
It also admitted that it paid doctors through a speakers program to prescribe the drugs and paid an electronic medical records company to send doctors information on patients that encouraged more opioid prescriptions.
Although Purdue produced only a fraction of the opioid pills that flooded the market in the 2000s, advocates have long seen aggressive sales of OxyContin as one of the touchstones of the crisis. At a 1996 event to rally Purdue’s sales force, Richard Sackler, then a top Purdue executive and later president of the company, called for a “blizzard of prescriptions.”
While Purdue is expected to pay $225 million, the government agreed in the plea deal not to collect $5.3 billion in criminal forfeitures and fines and $2.8 billion in civil liabilities. Instead, portions of that money are considered part of the broader settlement — and the federal government will receive a small slice of that.
Up to $7 billion from Sackler family members
The broader settlement calls for members of the Sackler family who own the company to contribute up to $7 billion over 15 years. Most of the money is to go to government entities to use to fight the opioid crisis.
It’s among the largest in a series of settlements by drugmakers, wholesalers and pharmacies in recent years — and the only major one that includes payments for some individual victims or their survivors.
Together, the settlements are worth more than $50 billion, and most of the money is to be used to address the overdose epidemic.
Under the Purdue deal, members of the Sackler family would be shielded from lawsuits over opioids from those who agree to the payments.
Purdue itself would cease to exist and be replaced by a new company, Knoa Pharma, which would operate for the public benefit and have a board appointed by the states.
The reorganization is considered one of the most complicated ever. By the end of last year, Purdue had paid law firms and other professionals working on all sides of the case more than $1 billion, according to a court filing.
The sentencing doesn’t include the company’s owners
Members of the Sackler family have long been cast as villains in the opioid crisis, seeking to increase profits even as it became clear people were becoming addicted to OxyContin and overdosing.
But no members of the family were charged.
Family members received $10.7 billion in payments from Purdue from 2008 to 2018 — with nearly half of it used to pay taxes on behalf of Purdue. They have not been paid by the company since 2018 — and the last of the family members left Purdue’s board in 2019.
Under the settlement, they would not object if their names are removed from museums and other institutions they’ve supported — something that’s already happening.
Some victims want people prosecuted
More than 54,000 people with personal injury claims against Purdue voted to accept the settlement, and 218 voted against it.
Still, some victims and their family members have been pushing back for years, asserting that the settlement and the guilty plea stop short of justice for victims of a crisis that has been linked to 900,000 deaths in the U.S. since 1999.
The sentencing will give them another chance to make that case.
Outside the courthouse Tuesday, Stacy Schwab said she was dependent on OxyContin 20 years ago, that opioids killed one family member, and that another is struggling with addiction and insurance doesn’t cover the treatment she needs. That makes Schwab furious at Sackler family members.
“My family just doesn’t have the money to pay for private treatment for her, while they’re sitting on billions of dollars,” Schwab said.
Like others, she said it’s good that the judge is giving victims a chance to be heard.
Meanwhile Tuesday, a lawyer filed a request that the federal government’s expected $225 million be used for victims’ medical care.
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Associated Press reporters Alanna Durkin Richer and Emily Wang contributed to this article.