Last January, federal authorities announced that Practice Fusion, the EHR company involved in that scheme, would pay $145 million to settle criminal and civil cases. Christina Nolan, the U.S. Attorney for the District of Vermont, which investigated the criminal case, called the company’s conduct “abhorrent.” The drugmaker involved was not named.
Last week, the U.S. Department of Justice announced a “global resolution” of its criminal and civil investigations into Purdue Pharma, the company widely implicated in the origins of the opioid epidemic.
Purdue will pay more than $8.3 billion in criminal fines and civil forfeitures, and members of the Sackler family, the company’s shareholders, have agreed to pay $225 million to resolve the civil investigation.
The settlement is subject to approval by the New York court overseeing Purdue’s bankruptcy case.
New Hampshire is one of 25 states that oppose the proposed deal.
A key reason for that is a plan to transfer Purdue’s assets to a new “public benefit corporation.”
“The PBC would be charged with providing its medicines in a manner as safe as possible, without diversions, while providing millions of doses of medicines to treat opioids addiction and reverse overdoses and otherwise taking into account long-term public health interests,” Rosen said at last week’s announcement.
James Boffetti, a New Hampshire associate attorney general, is overseeing the state’s lawsuits against a number of drugmakers and distributors implicated in the opioid crisis.
Because the states are among the creditors in Purdue’s bankruptcy, creating such a PBC with Purdue’s assets “would essentially give the states an ownership interest in running an opioid company,” he said.
“Why would we want to be involved in the sale of oxycontin for profit?” Boffetti asked. “It defies logic that this is something we ought to be involved in.”
The only argument might be that creating a PBC could direct more money toward the company’s creditors, which could put more resources into addiction treatment, Boffetti said, but it’s not worth the risks.
“What happens if in the way this corporation sells oxycontin that we have concerns about their conduct?” he asked. “The states are in bed with this company. Who’s going to be the one to say no, you can’t do it that way?
Boffetti also said a “credible buyer” is interested in purchasing Purdue’s assets.
At last week’s announcement, Rosen said the penalties Purdue Pharma and the Sacklers would pay under the agreement are substantial.
However, Boffetti said the states have been fighting for more than a year to get financial records from the Sacklers to show how much money they transferred out of Purdue before the company filed for bankruptcy protection — by some estimates $10 billion to $12 billion. “It’s a lot of money and they get to keep that under this arrangement,” he said.
The fines in the proposed settlement would be paid from the sale of international assets Purdue acquired in recent years, Boffetti said. “But that $12 billion they sucked out of Purdue the last couple of years, they will get to keep that, so they live a very comfortable billionaire life.
Rosen said the resolution before the bankruptcy court “does not prohibit future criminal or civil penalties against Purdue Pharma’s executives or employees.”
But Boffetti does not expect that to happen. “If the U.S. Department of Justice thought they had some sort of criminal case, they would not have entered into this agreement,” he said. “This will be the end of it.”
The human cost
Boffetti said he thinks about the families who have lost loved ones to the drug epidemic. Purdue may have agreed to plead guilty to felony criminal charges, he said, but “no one’s going to jail.”
Five years ago, Anne Marie and Jim Zanfagna of Plaistow lost their 25-year-old daughter Jacqueline to a drug overdose. They joined a class-action lawsuit against Purdue Pharma, seeking damages for the death of their child.
The Zanfagnas said they’re glad New Hampshire is holding out for more in the settlement. “The Sacklers ought to pay and go to jail too,” said Anne Marie. “Let’s get real justice.”
Jacqueline was diagnosed with bipolar disorder. Her parents now believe that she started using pills to try to “feel normal.” When she couldn’t get pills, she turned to heroin.
Jim Zanfagna said Purdue Pharma misrepresented the danger its drug oxycontin posed when the company pushed it to doctors. By the time doctors and patients realized the drug was addictive, he said, “It was too late.”
“But the Sacklers didn’t care. They were making money,” he said.
What would justice look like for their family?
“First of all, the company’s going out of business, so I mean that’s a start,” Jim Zanfagna said. “You’d like to see the money that is realized from fines … go back into the community to help people.”
“Put them in jail,” his wife said. “They killed my daughter, in essence.”
Last week, the Bipartisan Opioid Task Force co-chaired by Reps. Annie Kuster, D-N.H., and Brian Fitzpatrick, R-Pa., issued a statement saying the proposed Purdue agreement “is a small step towards justice, but it’s not enough.”
“There will be no justice until members of the Sackler family are held personally criminally liable for what they have done,” the lawmakers said. “Allowing companies to buy their way out of violating federal laws is not justice.”
New Hampshire and the other states will have their day in court, Boffetti said. “And we will continue to oppose it and to keep fighting for a better deal,” he said.
“We may lose but we’re going to continue that argument.”