Senators Call Out Barr Over Terms Of Perdue Pharma Settlement

Liz Carey

Washington, D.C. (WorkersCompensation.com) – Several U.S. Senators are taking issue with the settlement reached between the U.S. Department of Justice and Perdue Pharma.

In a letter from U.S. Sens. Tammy Baldwin (D-Wis.), Sheldon Whitehouse (D-R.I.), Maggie Hassan (D-N.H.) and Elizabeth Warren (D-Mass.) to U.S. Attorney General Bill Barr, the lawmakers called the $8 billion settlement an “inappropriate use of federal authority,” and criticized its viability.

In October, the DOJ announced it had reached the settlement deal with the maker of OxyContin, in exchange for guilty pleas on three charges.

The company pleaded guilty to three federal criminal charges for its role in the opioid epidemic that has gripped the nation since 1999. In addition, the company will pay $3.5 billion in fines, forfeit $2 billion in past profits, and pay $2.8 billion in civil liabilities. Money derived from the company’s payments will go toward treatment and abatement programs, the DOJ said.

Because the company is in bankruptcy and lacks the cash on hand to pay the fines, the company will be dissolved, the DOJ said. Assets from the company will be used to create a new company controlled by a trust. The DOJ said the new company would function to benefit the public interest, instead of maximizing profits. Future earnings will go toward paying fines and penalties, which will be used to combat the opioid crisis, the DOJ said.

“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen n a release during the announcement of the deal. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”

At issue is the provision that makes Perdue a public benefit company. The senators said that they, along with 25 state attorneys general already suing Perdue, object to the provision because it would make local and state government the owners of a company that continues to make a drug that has killed thousands of their constituents.

According to the Centers for Disease Control (CDC) and Prevention, nearly 450,000 people in the U.S. have died of opioid overdoses between 1999 and 2018.

The senators said the idea, generated by Perdue and the Sackler family, would protect the Sackler family and the company too much.

“Purdue and the Sackler family are the driving force behind the inclusion of the PBC in the agreement, and had proposed that it be included during the company’s ongoing bankruptcy proceedings. Allowing Purdue to emerge from bankruptcy as a PBC would enable it to shed its liability while continuing to manufacture and sell opioids, with its creditors—including state and local governments who have sued Purdue for the harms it caused—owning a stake in its profits,” the senators wrote.

The senators also questioned the efficacy of the deal, writing that the agreement would allow Perdue to give states less money up front and promise to pay the remaining terms of the settlement out of future profits that are uncertain.

“DOJ is not serving the interests of the public by agreeing to Purdue’s proposal. The plan allows Purdue to inflate the value of the settlement by relying on its own rosy analysis of the company’s value and promising to pay the terms of a settlement out of the future profits of the company. States would get less money immediately and, because these profits are uncertain, may never recover the full value of the settlement. At a minimum, the PBC also creates the appearance of a conflict of interest, as citizens may wonder whether their government will effectively regulate a company in which it has a financial interest. In a worst case, aligning the financial interests of States with the increasing sale of opioids, which is the very reason the lawsuit was brought against Purdue in the first place, could significantly and, negatively impact public health,” the senators wrote.

The Senators called on Barr to defer court approval of the settlement until states and local governments, as well as other stakeholders, have addressed the issues.

The letter was also signed by Sens. Chuck Schumer (D-N.Y.), the Senate Democratic Leader; Jeanne Shaheen (D-N.H.); Richard Blumenthal (D-Conn.); Dianne Feinstein (D-Cal.); Dick Durbin (D-Ill.); Ed Markey (D-Mass.), Mazie Hirono (D-Hi.); Amy Klobuchar (D-Minn.); Bernie Sanders (I-Ver.); Tina Smith (D-Minn.) and Jeff Merkley (D-Ore.).

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