Preliminary CDC data show that drug overdose deaths, after a brief dip in 2018, hit a record high in 2019, with nearly 72,000 fatalities. The toll continues to climb this year amid the coronavirus pandemic. Opioids, which account for most drug deaths, were involved in two out of every three drug overdose fatalities in 2018, according to the CDC.
Controversy over the agreement: The resolution with the Trump administration also includes a mandate to dissolve Purdue, with the Sacklers relinquishing all ownership and control. The company’s assets, pending the approval of a bankruptcy court, will be redirected to a government-owned “public benefit company” that will still produce OxyContin and opioid addiction treatment.
Last week, 25 state attorneys general wrote a letter urging the Justice Department against making such a move, saying the government shouldn’t benefit from sales of OxyContin, the 25-year-old drug that helped power the addiction crisis. Deputy Attorney General Jeffrey Rosen defended the plan against those criticisms.
“It was also our judgment on this that while prescription opioids can be abused, diverted, misused in very harmful ways, it’s a prescription pharmaceutical that does have some positive uses, and maintaining supply of those is itself something that could be beneficial,” Rosen told reporters Wednesday.
Rosen declined to say why DOJ didn’t pursue criminal charges against the Sacklers, noting only that the civil resolution doesn’t absolve them from other legal claims.
Purdue will plead guilty to conspiracy to defraud the government and kickback schemes involving payments to prescribing doctors and an electronic health records company.
OxyContin maker Purdue Pharma may settle legal claims with a new ‘public trust’ that would still be dedicated to profit
Purdue Pharma, the company that makes OxyContin and other potentially addictive prescription opioids, has agreed to plead guilty to three felony counts and reached a settlement potentially worth at least US$8.3 billion with the Justice Department.
The deal could clear the way for Purdue to transform from a profit-seeking privately held company into a public trust that serves the public good, as the company has proposed.
But the settlement is subject to the approval of the federal judge overseeing Purdue’s bankruptcy case. And it may not resolve the thousands of lawsuits Purdue faces for its role in creating the opioid crisis. Notably, the attorneys general from 25 states called on the government a week before the Justice Department announced the deal to simply force the sale of the drugmaker to a new owner instead.
I study the history of prescription drugs (and I have served as a paid consultant and expert witness in opioid litigation). Although there are some recent efforts to establish nonprofit drugmakers to help make certain pharmaceuticals more readily available, I know of no historical precedent for a big drugmaker like Purdue becoming a nonprofit public health provider.
But two similarly ambitious efforts to build alternatives to the profit-driven pharmaceutical model during and immediately after World War II suggest the potential limits of how well this arrangement might work.
Penicillin was discovered in 1928 but did not come into use until World War II. It was the first antibiotic: a genuinely revolutionary class of drugs that vanquished previously incurable infectious illnesses.
Because of penicillin’s importance for the war effort, the federal government played an active role in its development. Federal scientists developed ways to mass-produce it, federal agencies persuaded reluctant pharmaceutical companies to manufacture it and the government’s “penicillin czar” decided which patients would receive the precious drug.
Despite the high stakes and the faith in centralized planning, no one at that time appears to have even considered the possibility of noncommercial or nonprofit development of antibiotics.
As was the case with wartime goods such as rubber and tanks, private companies with federal contracts made penicillin. As was also the case with other wartime goods, the arrangement was an unqualified success. It dramatically increased production, and allocated the antibiotic so as to best serve the war effort.
For penicillin, as with other goods, federal economic controls quickly faded after the war. As the medical historian Scott Podolsky has observed, drugmakers, freed from government restraints, unleashed an avalanche of brand-name antibiotics whose high-powered marketing campaigns encouraged the overuse and misuse of the new medicines.
Interestingly, the Sackler brothers got their start by selling antibiotics. The Sacklers, future owners of Purdue Pharma, were pioneers of medical advertising who abandoned earlier restraints and advised their sales representatives to see physicians as “prey.”
The Veterans Administration and the Public Health Service sought to keep
Purdue Pharma, the manufacturer of the prescription painkiller OxyContin, reached an $8 billion settlement with the Department of Justice and will plead guilty to three federal criminal charges in connection with its role in America’s opioid crisis.
The Justice Department announced on Wednesday that it had reached a resolution in its investigation into individual shareholders from the Sackler family, who own the pharmaceutical company.
Purdue Pharma will plead guilty in a New Jersey federal court to three felony counts, including one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.
The deal does not release the company’s executives or owners from criminal liability and a criminal investigation is ongoing.
“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,” Deputy Attorney General Jeffrey Rosen said in the announcement. “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.”
According to the Justice Department, the resolution includes the largest penalties ever levied against a pharmaceutical company and includes a criminal fine of $3.544 billion, an additional $2 billion in criminal forfeiture and a $2.8 billion civil settlement.
Separately, the Sackler family has agreed to pay $225 million in damages.
A Rebirth Behind Bars
Steve Miller, who became chairman of the company’s board in 2018, said in a press release that the company “deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice.”
The company filed for bankruptcy last year as it wades through thousands of civil lawsuits. As part of the resolution, Purdue Pharma would cease to operate in its current form and would instead transition to a public benefit company owned by a trust or similar entity. The new company would be operated under different ownership and “will work to provide for free or at cost millions of doses of lifesaving opioid addiction treatment and overdose reversal medicines,” the press release stated.
Purdue Pharma, the company that makes OxyContin, the powerful prescription painkiller that experts say helped touch off an opioid epidemic, will plead guilty to three federal criminal charges as part of a settlement of more than $8 billion, Justice Department officials told The Associated Press.
The company will plead guilty to three counts, including conspiracy to defraud the United States and violating federal anti-kickback laws, the officials said. The resolution will be detailed in a bankruptcy court filing in federal court.
The deal does not release any of the company’s executives or owners — members of the wealthy Sackler family — from criminal liability. A criminal investigation is ongoing.
The officials were not authorized to discuss the investigation publicly and spoke on condition of anonymity.
The settlement is the highest-profile display yet of the federal government seeking to hold a major drugmaker responsible for an opioid addiction and overdose crisis linked to more than 470,000 deaths in the country since 2000.
The settlement comes less than two weeks before a presidential election where the opioid epidemic has taken a political back seat to the coronavirus pandemic and other issues. But the deal does give President Donald Trump’s administration an example of action on the addiction crisis, which he promised early in his term.
As part of the resolution, Purdue will admit that it impeded the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avoid drug diversion and by reporting misleading information to the agency to boost the company’s manufacturing quotas, the officials said.
A Justice Department official said Purdue had been representing to the DEA that it had “robust controls” to avoid opioid diversion but instead had been “disregarding red flags their own systems were sending up.”
Purdue will also admit to violating federal anti-kickback laws by paying doctors, through a speaking program, to induce them to write more prescriptions for the company’s opioids and for using electronic health records software to influence the prescription of pain medication, according to the officials.
Purdue will make a direct payment to the government of $225 million, which is part of a larger $2 billion criminal forfeiture. In addition to that forfeiture, Purdue also faces a $3.54 billion criminal fine, though that money probably will not be fully collected because it will be taken through a bankruptcy, which includes a large number of other creditors. Purdue will also agree to $2.8 billion in damages to resolve its civil liability.
Purdue would transform into a public benefit company, meaning it would be governed by a trust that has to balance the trust’s interests against those of the American public and public health, the officials said. The Sacklers would not be involved in the new company and part of the money from
Traditional Chinese medicine maker soars after top respiratory expert backs drug in potentially inhibiting coronavirus
Shares of a traditional Chinese medicine (TCM) company jumped after receiving validation from the nation’s top respiratory expert on its drug’s effect against the coronavirus, joining two other peers that have enjoyed huge gains this year.
Guangzhou Baiyunshan Pharmaceutical Holdings soared 13 per cent to HK$21.75 in Hong Kong and by 10 per cent to 34.18 yuan in Shanghai on Friday, after Zhong Nanshan, the public face of China’s fight against the Covid-19 pandemic, said one of its products could potentially inhibit the coronavirus.
Researchers led by Zhong found that Banlangen granules, a herbal medicine popular in China for treating common cold and flu, was effective against the virus in a series of in-vitro studies, Chinese newspaper Nanfang Daily quoted him as saying during a conference on Tuesday in Guangzhou. The drug was also widely used in the country during the 2003 severe acute respiratory syndrome (Sars) outbreak.
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Investors latched on to the hype surrounding the company even though the studies were still at an early stage and Zhong did not disclose whether or when any research paper or preclinical data will be published. The stock’s advance in Hong Kong marked its biggest daily jump since October 2018, while turnover ballooned 24 times to HK$240 million (US$31 million) from Thursday, according to Refinitiv data.
Many pointed to the speculative nature of the surge on Friday. “In-vitro studies data is usually the weakest among preclinical data,” wrote Huang Jianping, general manager at asset management firm Shanghai Leader Capital, in a post published on online stocks forum Xueqiu.
Normally, pharmaceutical companies have to go through three phases of clinical trials on humans to establish the efficacy of the drugs, on top of evidence from animal experiments, he said. “If a Nasdaq-listed company said their drug was found to inhibit the virus in in-vitro studies, the company would be despised by the market.”
China relied heavily on traditional medicine to combat the virus earlier this year. Despite the government’s efforts to promote the use of such herbal remedies abroad, experts have warned that there is not enough evidence from clinical trials to establish their effectiveness.
Why it’s so hard for China to promote the use of traditional remedies abroad to treat Covid-19
And this is not the first time Zhong’s comments have contributed to a drug maker’s fortunes. Two Shenzhen-listed TCM companies, Shijiazhuang Yiling Pharmaceutical and Tianjin Chase Sun Pharmaceutical, reaped huge profits this year, after their drugs were included in the national standard therapy for Covid-19 patients and were recommended by Zhong.
Shares of Shijiazhuang Yiling have risen 94 per cent since a March