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Purdue Pharma Pleads Guilty to Violating Anti-Kickback Laws & Defrauding the U.S.

The Federal Docket

On October 21, the DOJ announced that Purdue Pharma, the pharmaceutical corporation best known for making the opioid pain killer Oxycotin, has agreed to enter a plea agreement with the U.S. Pursuant to the plea agreement, Purdue Pharma will plead guilty to three federal criminal charges relating to its role in contributing to the opioid crisis. The deal calls for over $8 billion in fines and fees and will require the company, which previously filed for bankruptcy, to dissolve.

Purdue Pharma will be pleading guilty to conspiracy to defraud the U.S. and violate the Food, Drug and Cosmetic Act and two counts of conspiracy to violate the Federal Anti-Kickback Statute based on payments to healthcare providers and a cloud-based electronic health records company that Purdue worked with in relation to its distribution of opioid pain medication.

The DOJ announced that the company will be recreated as a “public benefit company” controlled by a trust that will use any earnings to pay Purdue’s outstanding fines and combat the opioid crisis. Notably, the new company will continue producing and selling Oxycotin, as well as medications for treating addiction and overdoses. The deal also does not protect the Sackler family, the founders of Purdue Pharma, from criminal liability, and several states’ attorney generals are objecting to the DOJ’s plea agreement out of concerns that it is too lenient.

What criminal law practitioners can take from this is that the DOJ can now point to this case as precedent to target other pharmaceutical companies, as well as other businesses involved in the manufacturing and distribution of prescription pain medication. While we are already familiar with pill mill charges brought against doctors for dispensing opioids without a legitimate medical purpose, the government will likely increase its use of anti-kickback laws and healthcare fraud charges to accuse individuals of crimes relating to the pharmaceutical business.

Of course, opioid pain medications do have a legitimate purpose and can be legally manufacturers, prescribed, and distributed. Well-intentioned practitioners who treat chronic pain patients have been targeted for criminal prosecution based solely on government allegations that they are prescribing “too much” pain medication. Now, it appears the DOJ will be targeting pharmaceutical companies and possibly other actors involved in the manufacturing and distribution of opioid pain medication with healthcare fraud charges and other federal crimes.

Click here to read the article from CNN discussing the plea agreement.

Click here to read the plea agreement.

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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