Drugs

Purdue Pharma Pleads Guilty to Fraud, Kickbacks

Purdue Pharma pleaded guilty in New Jersey federal court 11/24 to conspiracies to defraud the United States and violate the anti-kickback law. It previously had agreed to the imposition of the largest penalties ever levied against a drug company.

The Department of Justice says the company pleaded guilty to an information charging it with three felonies — one count of dual-object conspiracy to defraud the U.S. and to violate the Federal Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the federal anti-kickback law.

As part of its guilty plea, the department says, Purdue admitted that from 5/2007 through at least 3/2017 it conspired to defraud the United States by impeding the lawful function of the Drug Enforcement Administration (DEA). Purdue represented to the DEA that it maintained an effective anti-diversion program when, in fact, it continued to market its opioid products to more than 100 healthcare providers whom the company had good reason to believe were diverting opioids. The department says the company also reported misleading information to DEA to boost Purdue’s manufacturing quotas. The misleading information comprised prescription data that included prescriptions written by doctors that the company had good reason to believe were engaged in diversion.

The company said that between 6/2009 and 3/2017 it made payments to two doctors through its doctor speaker program to induce the doctors to write more prescriptions of Purdue’s opioid products, thus violating the anti-kickback law. And from 4/2016 through 12/2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of OxyContin, Butrans, and Hysingla extended-release opioid products.

Under terms of a plea agreement, Purdue agreed to pay a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. It also agreed to a civil settlement that provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the department says, the Sackler family has agreed to pay $225 million to resolve its False Claims Act liability. The criminal and civil resolutions were announced on 10/21.

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