Purdue Pharma will be sentenced on Tuesday in New Jersey federal court for deceiving government regulators and paying kickbacks to doctors to boost opioid sales, completing a plea deal that clears the way for the company to dissolve in bankruptcy and use its assets to fund a $7.4 billion settlement intended to compensate people harmed by the opioid epidemic.
The company agreed to $5.5 billion in criminal fines, most of which will go unpaid under a 2020 agreement with the U.S. Department of Justice in which the agency will collect just $225 million. That deal allows Purdue to direct its remaining assets to repaying creditors, mostly state and local governments, which were left to deal with the cost and consequences of the opioid crisis in their communities.
Purdue Pharma had originally been scheduled to be sentenced last week, but the hearing was postponed by U.S. District Judge Madeline Cox Arleo. The delay was intended to allow greater public participation, giving more individuals the opportunity to speak about the company’s marketing practices for its painkiller OxyContin and its role in contributing to the opioid crisis in the United States.
“We recognize the importance of ensuring that victims can be heard, and we respect the court’s decision,” Purdue said in a statement ahead of Tuesday’s hearing.
Several victims of the opioid crisis submitted letters to the court sharing deeply personal accounts of suffering, loss, and addiction. In their statements, some urged the judge to reject the plea agreement entirely and called for prison sentences for Purdue Pharma executives and owners, arguing that accountability should extend beyond financial penalties.
The sentencing comes as many people harmed by opioids express frustration that Purdue Pharma’s long-running bankruptcy process has left them facing delays and difficulties in accessing compensation. The $7.4 billion settlement, which includes an $865 million fund for individuals affected by the crisis, has been described by the company and plaintiffs’ lawyers as a step toward justice for victims. However, a recent Reuters investigation highlights that the claims process has created significant obstacles for many individuals seeking payouts.
Judge Madeline Cox Arleo is expected to approve Purdue’s plea agreement at Tuesday’s hearing in Newark, New Jersey, which would impose a $3.5 billion criminal fine along with $2 billion in criminal forfeiture.
The bankruptcy case, which has stretched over more than six years and involved multiple appeals that reached the U.S. Supreme Court, is now nearing its conclusion. The sentencing represents one of the final steps needed before the broader settlement can move forward. Purdue has said it remains on track to exit bankruptcy by May 1, at which point it will end its existing corporate structure and transition into a new nonprofit entity focused on producing opioid addiction treatment and overdose-reversal medications.
As part of the plea agreement, Purdue Pharma admitted to paying kickbacks to physicians in order to boost sales of OxyContin and to misleading federal regulators regarding its efforts to prevent illicit use of the drug. No current or former company executives or owners were charged in the latest criminal proceedings.
The company had previously pleaded guilty in 2007 to misbranding and fraud charges related to its marketing of OxyContin, acknowledging that it falsely promoted the painkiller as being less addictive, less prone to abuse, and less likely to cause withdrawal symptoms compared with other opioid medications.
