October 6, 2020

ICYMI: The New Yorker Reports on Whitehouse and Hassan Efforts to Hold Purdue Pharma and Sackler Family Accountable During Settlement Negotiations with Justice Department

Washington, DC – In case you missed it, The New Yorker published an article by Patrick Radden Keefe that reported on U.S. Senators Sheldon Whitehouse (D-RI) and Maggie Hassan’s (D-NH) efforts to push the Department of Justice to hold Purdue Pharma and its owners, the Sackler family, accountable in newly revealed settlement negotiations as the company goes through federal bankruptcy.

In their letter, the Senators cited the Department of Justice’s past failure to proceed with serious criminal charges laid out in a 2006 memo by federal prosecutors and expressed their concern that “the Department will once again let connected lawyers obtain a settlement that does not adequately address the harms caused by the company.”

Senators Hassan and Whitehouse have repeatedly asked the Department for the 2006 prosecution memo and related information about the choice not to proceed with stronger action against Purdue and the Sacklers. The Department continues to refuse the Senators’ requests, even as details emerge in the press.

See below for excerpts from The New Yorker article:

The Sackler Family’s Plan to Keep Its Billions By Patrick Radden Keefe

[…] In a little-noticed court filing by the Department of Justice this summer, federal prosecutors indicated that they had several other ongoing investigations into alleged misconduct by Purdue. The filing states that, between 2010 and 2018, Purdue sent sales representatives to call on prescribers who the company knew “were facilitating medically unnecessary prescriptions.” The company also purportedly paid kickbacks to prescribers, motivating them to write yet more opioid prescriptions, and “paid kickbacks to specialty pharmacies to induce them to dispense prescriptions that other pharmacies refused to fill.” Purdue’s alleged conduct, Justice Department officials maintain, “gives rise to criminal liability.”

[…] Behind the scenes, lawyers for Purdue and its owners have been quietly negotiating with Donald Trump’s Justice Department to resolve all the various federal investigations in an overarching settlement, which would likely involve a fine but no charges against individual executives. In other words, the deal will be a reprise of the way that the company evaded comprehensive accountability in 2007. Multiple lawyers familiar with the matter told me that members of the Trump Administration have been pushing hard to finalize the deal before Election Day. The Administration will likely present such a settlement as a major victory against Big Pharma—and as another “promise kept” to Trump’s base.

[…] According to three attorneys familiar with the dynamics inside the Justice Department, career line prosecutors have pushed to sanction Purdue in a serious way, and have been alarmed by efforts by the department’s political leadership to soften the blow. Should that happen, it will mark a grim instance of Purdue’s history repeating itself: a robust federal investigation of the company being defanged, behind closed doors, by a coalition of Purdue lawyers and political appointees. And it seems likely, as was also the case in 2007, that this failure will be dressed up as a success: a guilty plea from the company, another fine.

If such a deal is struck, it is probable that no Purdue executives will face felony charges. This week, two Democratic U.S. senators—Maggie Hassan, of New Hampshire, and Sheldon Whitehouse, of Rhode Island—sent a letter to Barr citing “DOJ’s history of leniency with Purdue” and expressing concern that the department “will once again let connected lawyers obtain a settlement that does not adequately address the harms caused by the company.” In an added irony, if the Trump Administration does seek a fine, the funds could come not from the Sacklers but from the limited pool of money available from the bankruptcy proceeding. More than a hundred thousand individuals—victims of the opioid crisis, people who have lost loved ones or struggled with addiction themselves—have filed claims as “creditors” of Purdue. In the zero-sum calculus of a bankruptcy proceeding, the bigger the financial penalty extracted by federal prosecutors, the less money there will be left over for these and other creditors. […]

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