BURLINGTON, Vt. – On Tuesday, pharmaceutical giant Purdue Pharma pleaded guilty in federal court to three conspiracy charges stemming from the company’s marketing of Oxycontin and other opioid products.
The charges include one count of conspiracy to violate the Federal Anti-Kickback Statute, a violation that came to light through an investigation by the Vermont U.S. Attorney’s Office. The investigation revealed that Purdue executives paid off an electronic health records company to generate more referrals for Oxycontin prescriptions, which contributed to the opioid epidemic that has killed thousands of Americans.
U.S. Attorney Christina Nolan said it was an unprecedented and ambitious investigation that may eventually serve as a blueprint for future efforts to hold pharmaceutical companies accountable.
She credited the work of Assistant U.S. Attorneys Owen Foster and Michael Drescher, who put significant time into the investigation along with other staff members at the Vermont U.S. Attorney’s Office.
“They worked with no models, there’s no playbook for how to investigate these cases,” Nolan said. “Two Assistant U.S. Attorneys, in an incredibly efficient period of time, broke new ground in healthcare law and sent a message to big pharma and big tech.”
Vermont’s involvement in digging into Purdue’s predatory prescribing scheme began when Foster was investigating the electronic health record company Practice Fusion. As questions began to arise about the company’s relationship with Purdue, Drescher was called on to help accelerate the investigation.
“We traveled all over the eastern part of the United States interviewing witnesses who were employees or former employees of Purdue and Practice Fusion,” Drescher said. “We spent a lot of time, more time than you could really count, reviewing documents.”
That work soon lead to a revelation that from April 2016 through December 2016, Purdue Pharma had paid nearly $1 million in exchange for Practice Fusion installing a prompt in its software intended to cause doctors to refer, recommend and arrange for the ordering of Purdue’s opioid products.
“Paying money to influence the way doctors would interact with their patient while the patient was in the doctor’s office,” Drescher said. “They paid money to Practice Fusion to influence that relationship in the hope that it would generate increasing prescriptions of this extraordinarily dangerous opioid.”
During Tuesday’s federal court proceedings in Newark, New Jersey, the chairman of Purdue’s Board of Electors Robert S. Miller admitted that the purpose of the software prompt was to increase the company’s extended release opioid sales, and that it knew it was unlawful to pay in exchange for recommending such prescriptions.
Purdue’s guilty plea marks the first time in history that a pharmaceutical company has been found guilty in connection with a relationship to an electronic health records company.
“As today’s felony guilty pleas demonstrate, Purdue put opioid profits ahead of people and corrupted the sacred doctor-patient relationship. We hope the company’s guilty plea sends a message that the Justice Department will not allow big pharma and big tech to engage in illegal profit-generating schemes that interfere with sound medicine. We hope, also, that this guilty plea will bring some sense of justice to those who have suffered from opioid addictions involving oxycodone and some vindication for families and loved ones of those who did not survive such addiction.”U.S. Attorney Christina Nolan
Under the terms of the plea agreement, Purdue agreed to receive the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.5 billion and an additional $2 billion in criminal forfeiture.
In October when the settlement was initially reached, there was widespread criticism over the fact that none of Purdue’s leaders who made billions off of the scheme faced jail time. Nolan responded to the concerns on Tuesday.
“Nothing about this resolution releases any individual from criminal liability, and indeed, the U.S. Attorney’s Office in New Jersey said they have ongoing criminal investigations of individuals.”
Purdue Pharma will be dissolved as part of the plea deal, and its assets will be used to form a new “public benefit company” controlled by a trust.
According to the Department of Justice, future earnings will go toward combatting the opioid crisis.
In January, it was announced that Practice Fusion will pay $145 million for their role in the scheme.
According to the Centers for Disease Control and Prevention, more than 750,000 people have died since 1999 from a drug overdose. Two out of three drug overdose deaths in 2018 involved an opioid, and overdose deaths have increased almost six times since 1999.
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