The ‘Criminal Sentencing’ of Purdue Was a Cruel Fiction

The following story is co-published with Matt Bivens’ Substack newsletter, The 100 Days.

We are told that Purdue Pharma, which long ago pleaded guilty to its crimes, this week finally had to “stand before a judge” and be criminally sentenced. The judge, who “at times appeared to be on the verge of tears” according to the Associated Press, said she found the company guilty of “a purposeful, intentional and sophisticated crime scheme.” Headlines and government press releases immediately trumpeted the impressive-sounding $5.5 billion penalty she signed off on. Families whose loved ones had become addicted to (and in some cases died from) doctor-prescribed opioids spoke for more than five hours about their suffering. The judge ordered the chairman of Purdue Pharma to apologize directly to those families for the “intentional and sophisticated crime scheme” that had created all of that addiction. He apologized obediently. With a sigh of contentment, the Justice Department announced Purdue had at last been held “accountable.” Everyone agreed the company would now be ceremonially destroyed, and never allowed to do business again.

And almost none of it was true.

Oh, the criminal conspiracy that intentionally got millions addicted, and raked in billions of dollars — that part was real. So was the suffering ordinary Americans testified to for many hours, and in fact I hesitate to criticize a process that might have unburdened a few people, might have given them relief to feel they’d been heard.

But the hard truth is that they weren’t heard. Sure, a lone judge listened to them, and might have cried a little bit, and promised to keep photos of their dead loved ones in her office for as long as she was a judge. But otherwise, no one relevant “stood before a judge” or apologized. No one paid any kind of a real penalty. The $5.5 billion in criminal fines is a wild, ongoing and shameless fabrication. The judge herself publicly lamented the ways in which justice had fallen short. And Purdue is not even really being “destroyed.”

In fact, neither the company Purdue Pharma nor the Sackler family that created it will even stop selling OxyContin.

Here’s a quick rundown of the rampant dishonesty of this moment.

“Purdue” did not stand before a judge for sentencing.

“Purdue Pharma” was the corporate address of a criminal conspiracy to trick doctors into a massive increase in opioid prescribing. That conspiracy itself was directed by a handful of human beings: Purdue executives and high-priced consultants, and also leading members of the fabulously wealthy Sackler family. Eventually, the 20-year run of doctor-prescribed opioid addiction they created had become so outrageous and painful that the company was on verge of being destroyed by lawsuits, and the human beings controlling the company possibly even jailed. At that point, those guilty humans — the Sacklers and their lieutenants — sucked billions of dollars out of the company and hid it abroad, declared the company bankrupt and then started negotiating.

The current Purdue Pharma chairman, Steve Miller, was brought in for the closing act. He’s a former automobile manufacturing executive who’s made a name for himself stepping in to crisis-manage dying companies. He was hired to shepherd Purdue through its multibillion-dollar bankruptcy.

So, he is just a person (one of many) paid fabulously by the Sacklers to clean up their mess.

Miller was paid to stand there Tuesday in U.S. District Court in New Jersey and let the families victimized by the Sacklers heap abuse on him, and to let the judge tell him how bad Purdue sucks, and to apologize on demand like a good dog. He did all of that.

But not one of the human beings involved in the conspiracy, no one guilty of the relevant crimes — crimes that led to the deaths of hundreds of thousands of people — was there. “Purdue Chairman Miller” had nothing to do with the crimes he apologized for. He was the equivalent of an actor in a play, put on to create the impression that someone is apologizing.

Even the judge knows everyone is getting away with murder

Family members addressing the court Tuesday asked the judge to reject this plea deal, which was hammered out between Purdue and the U.S. Justice Department back in 2020, in the final days of the first Trump administration. They said they wanted to see the human beings who orchestrated the conspiracy — a criminal conspiracy that, remember, killed hundreds of thousands of people — go to prison.

U.S. District Judge Madeline Cox Arleo could have told the family members that they were asking for something inappropriate. She did not.

“The inadequacy of what the law can offer today must be plainly stated,” she said, and: “It is not lost on me that those who started the epidemic will not serve a sentence.”

As reported by CNBC:

Arleo said she could not jail Purdue executives or company owners because the U.S. Department of Justice had not brought charges against them, only the company.

The judge said accepting the plea deal was the best outcome she could achieve, and that she hoped future cases would be handled differently, so that corporate wrongdoers do not get the message that they can “pay fines as the cost of doing business.”

The Sacklers long ago paid small fines to escape justice

More than five years ago, several Sackler family members paid a pathetic $225 million to the U.S. Justice Department as the cost of doing business. This was a personal fine they paid on their own behalf. It was pocket change, perhaps 1% of the billions they had earned pushing opioids across America. But it was enough to get the Justice Department to go away.

The Justice Department apparently didn’t interview a single Sackler before reaching this settlement decision.

“The authorities were so deferential toward the Sacklers that nobody had even bothered to question them,” wrote author Patrick Keefe in his indispensable book on that era, “Empire of Pain.” “A decision had been made at high levels of the Trump administration that this matter would be resolved quickly and with a soft touch. Some of the career attorneys at Justice were deeply unhappy with this move, so much so that they wrote confidential memos registering their objections, to preserve a record of what they believed to be a miscarriage of justice.”

That frustration could be heard back then between the lines of a defiant Justice Department press release: It stated that “years of hard work by the FBI” had found Purdue executives and the Sacklers guilty of “illegal and inexcusable activity.” And it added that, while the Justice Department was accepting a small donation of $225 million to look the other way, it reserved the right to reverse itself at any point and to bring criminal charges, including specifically against the Sacklers:

If “years of hard work by the FBI” had found “illegal and inexcusable activity” — why excuse it?

The Justice Department back then claimed Purdue Pharma itself would also be fined more than $8 billion (in both criminal and civil federal penalties), under a deal in which the company would plead guilty to criminal behavior in encouraging an epidemic of addiction for money. Again, not a single individual from Purdue’s C suite was named.

This week, the empty shell of “Purdue Pharma” was finally sentenced under that long-ago brokered plea deal, and “Purdue Chairman Steve Miller” stood there and “apologized,” and the U.S. Justice Department then crowed in a new press release about its successful work to “hold Purdue accountable.” Quote after self-congratulatory quote attributed to top Justice officials — from the attorney general to the heads of the FBI and the DEA — decried how “Purdue Pharma,” motivated by “greed,” had engaged in “reckless and unlawful conduct” that created a “plague that has ruined lives and destroyed families,” “a public health catastrophe,” “widespread devastation,” etc.

But the human beings who visited all of that horror on America weren’t there at the sentencing. They were off enjoying their lives and their wealth.

The Sacklers are still selling OxyContin

Their family empire includes U.K.-based Mundipharma, which earns far more than $1 billion a year selling OxyContin in China and other parts foreign.

Who knows, maybe someday Mundipharma will open a U.S. office, and start selling opioids to the American market. After all, Mundipharma isn’t guilty of anything — that was Purdue Pharma.

If Mundipharma did ever open a U.S. affiliate, I wonder what they’d call it.

Purdundipharma? Murdue?

The $5.5 billion fine, like the earlier $8 billion fine, is a fiction

The Justice Department press release claimed that Purdue Pharma had just been “ordered to pay criminal penalties of over $5 billion for its role in fueling the opioid epidemic.” Media also trumpeted this $5.5 billion penalty.

In reality, as previously reviewed, only about $275 million of that massive penalty is being collected by the U.S. government.

The remaining $5 billion and change?

It is getting vaguely folded into the Purdue Pharma bankruptcy. So, to recap:

1. The Sacklers (according to the U.S. Supreme Court) siphoned $11 billion out of Purdue in just its final years and then left its carcass behind in bankruptcy; and now, through a yearslong bankruptcy process, have agreed to return about $6.5 billion (over 15 years, mind you).
2. The Justice Department has over the years stated it was fining Purdue not only the $5.5 billion in criminal penalties imposed in Tuesday’s sentence, but also $2.8 billion in civil penalties (over false medical billing to Medicare, Medicaid and other government health insurers), for a total of more than $8 billion. But once Justice had enjoyed the sugar high of headlines about multibillion-dollar penalties, it dropped those claims and said that, oh, Purdue was paying enough already through the bankruptcy process.
3. In other words, Justice could have made up any number for its press releases and soaked up our applause. But it’s only collecting about $275 million from Purdue and, of course, the $225 million-to-leave-us-alone money from the Sacklers.

Lawyers have billed more than $1 billion so far

A billion dollars for lawyers — paid up front! — has been billed, so far, on Purdue’s $7.4 billion bankruptcy settlement.

The lawyers have already collected more from the Purdue bankruptcy than all of the 140,000-odd individual victims who have filed claims ever will.

Consider that the entire payout to a given individual harmed by Purdue opioids is expected to run between $8,000 and $16,000 — before legal fees those individuals might accrue, since they each have to pay their own lawyers. Meanwhile, other lawyers have been billing the bankruptcy process $3,000 an hour. A single lawyer has been able to wrest more from Purdue’s carcass in a single day than the amount granted to any individual as total compensation for a life and family destroyed.

Purdue is not going away, it’s getting a makeover

On May 1, Purdue will “transfer its assets” to a new company, Knoa Pharma LLC.

There will be new ownership, and a court-mandated mission of public service. It sounds great, doesn’t it?

Here are some final fun facts:

1. Knoa Pharma, like Purdue now, will continue to sell OxyContin and other opioids, at least for a time, probably out of the same office spaces. Why is it doing that? Because it has to provide value to the creditors of the bankruptcy process.
2. Knoa’s main mission will be to manufacture and sell medications seen as treatments for opioid addiction. Which means that, when the state governments across America go to spend the billions of dollars allocated to them by the Purdue bankruptcy and other opioid legal settlements, they will likely be giving that money to Purdue Knoa Pharma.
3. Knoa Pharma (and other pharmaceutical companies) will likely spend money clawed back from Purdue and the Sacklers on the project of educating all of us about how the only responsible treatment for opioid addiction is to be started on lifelong opioid maintenance therapy. So, we will all have to stomach watching Big Pharma continue to monetize addiction into a tidy and reliable business line, and to do so with sanctimony.