(Reuters) – Purdue Pharma LP pleaded guilty to criminal charges over the handling of its addictive prescription painkiller OxyContin, capping a deal with federal prosecutors to resolve an investigation into the drugmaker’s role in the U.S. opioid crisis.
During a court hearing conducted remotely on Tuesday before U.S. District Judge Madeline Cox Arleo in New Jersey, Purdue pleaded guilty to three felonies covering widespread misconduct.
The criminal violations included conspiring to defraud U.S. officials and pay illegal kickbacks to both doctors and an electronic healthcare records vendor, all to help keep medically dubious opioid prescriptions flowing.
Members of the billionaire Sackler family who own Purdue were not part of Tuesday’s court proceedings and have not been criminally charged. They agreed in October to pay a separate $225 million civil penalty for allegedly causing false claims for OxyContin to be made to government healthcare programs such as Medicare. They have denied the allegations.
Purdue Chairman Steve Miller entered the guilty plea on the company’s behalf and admitted to its criminal conduct under questioning from Assistant U.S. Attorney J. Stephen Ferketic. Of the three criminal counts against Purdue, two were for violations of a federal anti-kickback law while another charged the Stamford, Connecticut-based company with defrauding the U.S. and violating the Food, Drug and Cosmetic Act.
Purdue’s plea deal carries more than $5.5 billion in penalties, most of which will go unpaid. A $3.54 billion criminal fine is set to be considered alongside trillions of dollars in unsecured claims as part of Purdue’s bankruptcy proceedings.
Purdue agreed to pay $225 million toward a $2 billion criminal forfeiture, meanwhile, with the Justice Department foregoing the rest if the company completes a bankruptcy reorganization dissolving itself and shifting assets to a “public benefit company” or similar entity that steers the $1.775 billion unpaid portion to thousands of U.S. communities suing it over the opioid crisis.
A sentencing imposing those penalties is set to come down the line, near the time Purdue receives court approval for a bankruptcy reorganization. (This story corrects amount of penalties in paragraph six to $5.5 billion from $6.5 billion)
Reporting by Mike Spector in New York; Editing by Chris Reese and Giles Elgood