The Department of Justice (DOJ) announced on Oct. 21 it had reached an $8 billion settlement with Purdue Pharma, the maker of OxyContin.
Purdue Pharma has been at the center of the nation’s opioid crisis for decades.
The company pleaded guilty to paying doctors to write more opioid prescriptions in violation of federal anti-kickback laws and to charges of defrauding the United States. Such business practices are credited with contributing to vast opioid abuse and over 450,000 opioid related deaths since 1999.
Since fines and settlement payments totaled over $8 billion, Purdue Pharma, who filed for bankruptcy in 2019, agreed to dissolve the company. The remaining assets will be used to create a new company, which will be managed by a trust and focus upon providing benefit to the American public.
This new company, according to the DOJ, will use its future earnings to pay the unpaid fines and penalties while continuing to produce opioids, like OxyContin, and develop overdose reversal drugs.
The DOJ presents this as a win in the struggle to combat the opioid epidemic. Deputy Attorney General Jeffrey A. Rosen argued, “The resolution in today’s announcement reaffirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”
Attorneys general from 25 states oppose the idea of turning Purdue Pharma into a public trust.
Some see the settlement as a political ploy related to the upcoming election. Others, like Attorney General Naura Healey, want a public investigation, arguing, “Justice in this case requires exposing the truth and holding the perpetrators accountable.”
Many want to see the DOJ do more, including prosecuting the Sackler family who own Purdue Pharma. There are concerns that, without a public reckoning, other pharmaceutical companies will perpetuate the same practices.
The most disturbing aspect of this case is the settlement plan itself. It calls for the creation of a new company that will continue to manufacture OxyContin, the drug that has been a major contributor in the U.S. opioid epidemic.
While this new company will also produce overdose reversal drugs and medication needed to assist those battling addiction, the focus will be on the continued manufacturing of opioids.
The state attorneys general have argued it would be better to sell Purdue Pharma to another privately owned company and distribute the proceeds to the states and individuals who have already filed over $2 trillion in claims in the Purdue Pharma bankruptcy case.
Regardless of the distribution of current or future money, the more fundamental questions are, “Why form a new public company at all? Why would the government want to create a conflict of interest by creating a company with a special relationship to itself?”
This process does two things.
First, it creates a company with a preferred status in the pharmaceutical industry that can be used as a political weapon, creating an unfair market, which potentially can be abused and manipulated.
New regulations and aggressive investigations will only be seen as unfair business practices designed to benefit this new company. More importantly, it biases the government with regard to how it regulates an already problematic industry.
Second, the creation of this company will erode public confidence in the government’s ability and willingness to continue to battle the opioid crisis.
It is difficult to be the sheriff who cleans up the opioid crisis when you willingly join the “good ole boys.” The optics are all wrong. This sends the wrong message to the industry and the public.
While $8 billion is a significant amount of money, it is still a token gesture as there are already over $2 trillion worth of claims in the Purdue Pharma bankruptcy case.
A more fitting action would have been to eliminate Purdue Pharma altogether and radically scale back and sell off its product lines. Thus, making a statement that predatory practices will no longer be tolerated.
Our government needs to learn from the mistakes it made during the investigation and prosecution of the tobacco industry in the 1990s. The government was too soft and not aggressive enough in exposing the predatory practices of Phillip Morris, R.J. Reynolds, and Brown and Williamson.
Just like the abusive practices of cigarette manufacturers, big pharmacology needs to be held accountable.
As Americans and people of faith, we need to insist our leaders hold the pharmacology industry accountable.
Our focus can no longer be upon making excuses or glossing over past sins. It has to be public safety and rebuilding the public trust.