Is $8 Billion Enough? OxyContin Maker Perdue Pharma Set to Go Public

At least one chapter of the opioid epidemic seems to be coming to an end. The pharmaceutical giant Perdue Pharma, the maker of OxyContin, has just agreed to pay more than $8 billion as part of a new settlement agreement with the U.S. Department of Justice.

Perdue Pharma has come under fire in recent years for its role in peddling prescription opioids to doctors and the American people while hiding the truth about how addictive these drugs can be. The company used aggressive tactics to sell as many drugs as possible. Doctors even received kickbacks for prescribing large quantities of the drug to their patients.

The company is owned by the wealthy Sackler Family, which made billions off the sale of opioids. As part of the settlement, the family has agreed to forfeit their control over the company, which means Perdue Pharmaceuticals will soon become a public trust owned and operated by the government. The settlement is expected to be approved by a federal bankruptcy judge later this year.

For their part, the Sacklers will admit to criminal wrongdoing and misleading doctors if the settlement is approved later this year.

The U.S. is still grappling with the fallout caused by the crisis over the last few decades, and the coronavirus has made treating addiction and chronic pain all the more challenging. While much of the settlement will go towards helping communities and families still struggling with addiction, critics say it’s just a drop in the bucket of what’s needed to right these wrongs.

Too Little Too Late

As for the $8 billion that’s expected to come from Purdue Pharma, the company has agreed to pay $3.5 billion in fines and forfeit around $2 billion in past profits, in addition to the $2.8 billion it agreed to pay in civil liability. 

Eight billion dollars may seem like a lot, but not when you divide it up among all the Americans still suffering from the opioid crisis.

The crisis first took off in the late 1990s when Perdue Pharma started marketing the drug to doctors and consumers. Things quickly escalated in the 2010s as overdose deaths involving heroin rose sharply. Patients would often turn to illicit drugs after taking prescription opioids, due to the addictive nature of OxyContin.

According to the CDC, the annual number of deaths involving prescription opioids, heroin, and synthetic opioids (like fentanyl), has increased almost six times since 1999. More than 750,000 people have died from a drug overdose since 1999. Of those, nearly 450,000 involved illicit opioids. In 2018, two out of three drug overdose deaths involved an opioid. The crisis continues to kill tens of thousands of people every year.

The CDC also estimates that the total “economic burden” of prescription opioid misuse alone in the United States is $78.5 billion a year, which includes the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement.

That’s a lot of money.

Critics are calling foul on the government and the Sackler Family. They point out that the company was already involved in dozens of lawsuits alleging wrongdoing. By accepting the settlement, the company would essentially dissolve all these lawsuits, so in a sense, they say Purdue Pharma is getting off easy.

Twenty-five state governors are also speaking out, saying they need more money for addiction treatment and recovery. Pennsylvania has been one of the states hit hardest by the crisis. Researchers at Penn State estimate that the crisis has cost the state’s criminal justice system around $526 million, in addition to all the expenses the state has accrued in recent years.

NY Gov. Andrew Cuomo published a scathing letter following the announcement of the settlement. He was outraged when he heard that executives from Perdue Pharma were asking to keep around $34 million in bonuses. He says that money should go to victims of the crisis, not those that made it possible.  

However, the DOJ says that there’s no law that automatically strips a company or family of all its assets once it’s accused of wrongdoing. The department says this is the most they can do right now to hold the company responsible in court.

A Public Perdue Pharma?

Assuming the settlement gets approved, the Sacklers will no longer have a stake in Perdue Pharma, but what does that mean for the future of the company?

Perdue Pharma will continue making and selling opioids to providers. Remember that these drugs serve a legitimate purpose. They can be used safely as long as providers don’t prescribe too much or to those at risk of addiction.

But now that opioids have caused so much pain and suffering all over the U.S., many critics say the government should stay out of the prescription painkiller business. Even if the company’s profits will go towards those in need, selling more drugs to the public just feels wrong to many who have struggled with addiction or those who have lost a loved one to the crisis.

Hopefully, the settlement will send money to those who need help in the short-term, but the Sackler Family and Perdue Pharma still owe a debt to society.

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