Justice Department Announces Global Resolution of Criminal and Civil Investigations with Opioid Manufacturer Purdue Pharma and Civil Settlement with Members of the Sackler Family

DISTRICT OF COLUMBIA: Today (10/21/2020), the Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP (Purdue), and a civil resolution of its civil investigation into individual shareholders from the Sackler family.  The resolutions with Purdue are subject to the approval of the bankruptcy court.

“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,” said Deputy Attorney General Jeffrey A. Rosen.  “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.”

“Today’s resolution is the result of years of hard work by the FBI and its partners to combat the opioid crisis in the U.S.,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office.  “Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients.  The FBI remains committed to holding companies accountable for their illegal and inexcusable activity and to seeking justice, on behalf of the victims, for those who contributed to the opioid crisis.”

“The opioid epidemic remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary L. Cantrell Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services’ Office of Inspector General.  “Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being.  With our law enforcement partners, we will continue to combat the opioid crisis, including holding the pharmaceutical industry and its executives accountable.”

“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” said Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott.  “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion.  The devastating ripple effect of Purdue’s actions left lives lost and others addicted.  DEA will continue to work tirelessly with our partners and the pharmaceutical industry to address the damage that has been done, and bring an end to this epidemic that has gripped the nation for far too long.”

Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with 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 criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture.  For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy.  Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act.  Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest.  Indeed, not only will the PBC endeavor to deliver legitimate prescription drugs in a manner as safe as possible, but it will aim to donate, or provide steep discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, and the proceeds of the trust will be directed toward State and local opioid abatement programs.  Based on the value that would be conferred to State and local governments through the PBC, the department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount.  The department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC so that its public health goals can be best accomplished.

The Criminal Pleas

As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas.  The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion.  The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.

In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute.  Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products.  Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.

The Civil Settlements

The department’s civil settlements resolve the United States’ claims as to both Purdue and its individual shareholders, members of the Sackler family.

The civil settlement with Purdue provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion.   This settlement resolves allegations that from 2010 to 2018, Purdue caused false claims to be submitted to federal health care programs, specifically Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Indian Health Service.  The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.  For example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times.  It also resolves the government’s allegations that Purdue engaged in three different kickback schemes to induce prescriptions of its opioids.  First, Purdue paid certain doctors ostensibly to provide educational talks to other health care professionals and serve as consultants, but in reality to induce them to prescribe more OxyContin.  Second, Purdue paid kickbacks to Practice Fusion, as described above.  Third, Purdue entered into contracts with certain specialty pharmacies to fill prescriptions for Purdue’s opioid drugs that other pharmacies had rejected as potentially lacking medical necessity.

Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers).  This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted.  Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market.  The Named Sacklers then approved a new marketing program beginning in 2013 called “Evolve to Excellence,” through which Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts” as their peers, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.

The civil settlement also resolves the government’s allegations that from approximately 2008 to 2018, at the Named Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were otherwise voidable as fraudulent transfers.

Today’s resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers.

Today’s announcement was made by Deputy Attorney General Jeffrey A. Rosen; Acting Assistant Attorney General of the Civil Division Jeffrey Clark; U.S. Attorney for the District of Vermont Christina Nolan; and First Assistant U.S. Attorney for the District of New Jersey Rachael Honig.  The criminal investigation was conducted by the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, the Consumer Protection Branch of the Department of Justice’s Civil Division, and the FBI’s Washington, D.C. and Newark Field Offices, with assistance by DEA.  The civil settlements were handled by the Fraud Section of the Commercial Litigation Branch of the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, with assistance from the Department of Health and Human Services, Office of General Counsel and Office of Counsel to the Inspector General; the Defense Health Agency; and the Office of Personnel Management.  The Purdue bankruptcy matter is being handled by the U.S. Attorney’s Office for the Southern District of New York and the Civil Division’s Commercial Litigation Branch, Corporate/Finance Section.

Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only.  There has been no determination of liability in the civil matters.

Can Opioids Be Replaced By CBD Oil?

Perhaps one of the more compelling arguments for legalizing medical cannabis is the fact that evidence heavily suggests that it is able to provide most of the benefits of widely-used opioids without the potentially lethal side effects that come from misuse.

Opioids are currently the most-abused type of prescription drug in the United States. In 2017, 47,000 Americans died as the result of opioid abuse, from drugs sourced from both legal and illegal sources. However, it’s difficult for many American medical professionals to avoid prescribing opioids due to the effectiveness of these drugs at managing pain.

This is exacerbated by the fact that pharmaceutical companies have been found complicit in lobbying for the wider use of these classes of drugs, which has led to unnecessary prescriptions and an increased potential for abuse. A number of cities have even sued the pharmaceutical industry for causing the crisis.

However, we already have a powerful equivalent to opioids for pain management that carries fewer side effects and reduced potential for abuse in medical cannabis – specifically cannabidiol, better known as CBD oil.

While medical cannabis, in general, has been found to have uses for the type of pain management normally treated by opioids, adoption has been slow thanks to fears and misconceptions about the psychoactive effects of cannabis, specifically its active ingredient tetrahydrocannabinol, also known as THC.

In the course of decades of medical cannabis research, it has been found that CBD has most of the benefits of THC, without the strong psychoactive effects that normally come with it. The potential for abuse is also much reduced from regular cannabis with THC, which in itself is already lower than the abusive potential of most opioids used for pain treatment.

CBD Oil and FibromyalgiaReasons CBD Oil hasn’t replaced opioids

So why hasn’t CBD oil been more widely adopted? Ultimately it has to do with the incredibly complicated nature of cannabis. Cannabis plants contain more than 500 chemical compounds. Isolating these compounds can be difficult and expensive, and it’s hard to recreate findings of previous studies create controls for studies involving cannabis due to the sheer complexity of the plant. Different strains of cannabis and varying levels of different chemicals in each strain can also affect different people in different ways.

There are also new discoveries made about cannabis that may dissuade its more widespread use. For instance, it was found that even relatively small doses can irreversibly alter the brains of teens, which may mean that in the near future, doctors may not prescribe cannabis for teens and young adults.

Conclusion

Even with these setbacks, however, it’s safe to say that CBD oil will likely have a role to play in helping solve the opioid crisis, though not by itself. The crisis is multifaceted, with economic and social angles to consider, which make it unlikely that any single solution will be workable.

Instead what is more likely to work might be a multi-pronged solution that involved weaning opioid abuse victims off drugs with different types of therapy as well as preventing the potential for abuse by substituting opioids with CBD when possible for pain management.

 

 

Study: Adjunctive Cannabis Use Improves Treatment Retention In Opioid-Dependent Subjects

MISSOURI: The intermittent use of cannabis can play a positive role in opioid-dependent subjects undergoing treatment, according to a review published in the journal Cannabis and Cannabinoid Research.

Researchers from the Washington University School of Medicine in St. Louis assessed data evaluating the relationship between the use of cannabis and opioids.

They reported, “Adjunct cannabis use alongside current treatment strategies could help to improve the number of individuals engaging in OUD (opioid use disorder) treatment, as well as increase treatment retention rates.”

Specifically, authors acknowledged that the use of CBD is associated with reduced opioids cravings and relapse, and that cannabis acts synergistically with opioids to provide analgesic benefit at sub-therapeutic doses. Authors also suggested that “cannabis may be an efficacious tool” in the treatment of symptoms associated with opioid withdrawal.

They concluded: “The opioid overdose epidemic is arguably the worst public health crisis in U.S. history. … A continental crisis of this magnitude warrants the immediate implementation of novel strategies that prevent opioid misuse, overdose, and death. Growing pre-clinical and clinical evidence appears to support the use of cannabis for these purposes. The evidence summarized in this article demonstrates the potential cannabis has to ease opioid withdrawal symptoms, reduce opioid consumption, ameliorate opioid cravings, prevent opioid relapse, improve OUD treatment retention, and reduce overdose deaths.”

Separate clinical data published online last week in the journal Addiction reported that daily cannabis users undergoing therapy for opioid dependence are far more likely to complete their treatment regimen than are non-users


For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. Full text of the study, “Emerging evidence for cannabis’ role in opioid use disorder,” appears in Cannabis and Cannabinoid Research. NORML’s fact-sheet, “Relationship between marijuana and opioids,” is online.

Oregon Marijuana Company Launches Cannabis For Opioids Swap

OREGON: Kaya Holdings has announced it will be holding talks with Oregon state and local law enforcement authorities and compliance officials to launch “Kaya Cares,” a Cannabis-for-Opioids swap program whereby people dependent on opioids and wishing to explore cannabis as a safe alternative can exchange their prescription opioids for cannabis products at no cost.

“We decided to step up and do our part after President Trump announced the war on the opioid epidemic,” commented Kaya Holdings CEO Craig Frank, “Numerous studies, including those reported by Newsweek, NBC News, US News and World Report, CNN and others, have shown that states with legal marijuana programs have declining rates of opioid addiction, with some states reporting a decrease in deaths as high as 25%. We want to help people in the communities we serve, as well as demonstrate that cannabis companies can be part of the President’s solution to the crisis.”

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KAYS presently operates three Kaya Shack marijuana retail stores to service the legal medical and recreational marijuana market in Oregon, with a fourth retail outlet scheduled to open shortly. Additionally, KAYS recently acquired a 26 acre parcel in Lebanon, Oregon, on which it plans to develop the Kaya Farms medical and recreational marijuana grow and manufacturing complex, at which it plans to explore development of  opioid-free cannabis infused pain relief alternatives.

Adds KAYS Senior Advisor, W. David Jones, “The opioid epidemic kills an average of 91 Americans a day. Beyond the human cost in lives and devastated families, the epidemic disrupts our economy with reduced productivity and increased healthcare costs. We realize this administration has been reviewing its stance on legal marijuana and we appreciate US Attorney Jeff Sessions’ clarification to Congress regarding the Cole Amendment. We wish to heed President Trump’s call to create constructive, private sector based initiatives with high probabilities of success. We believe a program like Kaya Cares and other initiatives to be undertaken by KAYS will help transition people away from dangerous opioids, making the government’s war on opioids a little more successful.”

Patients Dramatically Reduce Their Opioid Use Following Cannabis Access

CANADA: Pain patients enrolled in Canada’s legal medical cannabis access program significantly reduce their use of opioids over the long-term, according to longitudinal data provided by Tilray Canada Ltd – one of the nation’s largest, licensed provider of medicinal marijuana products.

Investigators assessed opioid use patterns in a cohort of 573 patients using Tilray-provided products. Among those patients who acknowledged using opioids upon enrollment in the trial, 51 percent reported ceasing their opiate use within six-months.

“The high rate of cannabis use for the treatment of chronic pain – and subsequent substitution for opioids – suggests that cannabis may play a harm-reduction role in the ongoing opioid dependence and overdose crisis,” said Philippe Lucas, lead investigator of the Tilray Observational Patient Study. “While the cannabis substitution effect for prescription drugs has been identified and assessed via cross-sectional and population-level research, this study provides a granular individual-level perspective of cannabis substitution for prescription drugs and associated improvement in quality of life over time.”

The study’s findings are similar to those reported among enrollees in medical cannabis programs in the United States, such as the experiences of patients in IllinoisMichiganMinnesotaNew Mexico, New York, and elsewhere.


For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. NORML’s fact-sheet highlighting the relevant, peer-reviewed research specific to the relationship between cannabis and opioids is available online.

Patients Use Fewer Opioids Following Enrollment In Medical Cannabis Program

NEW YORK:  Patients enrolled in New York state’s medical cannabis program reduce their use of opioids and spend less money on prescription medications, according to data published online in the journal Mental Health Clinician.

Investigators from GPI Clinical Research labs in Rochester and the University of Buffalo assessed trends in patients’ medical cannabis and prescription drug use following their enrollment in the state’s marijuana access program.

On average, subjects’ monthly analgesic prescription costs declined by 32 percent following enrollment, primarily due to a reduction in the use of opioid pills and fentanyl patches. “After three months treatment, medical cannabis improved [subjects’] quality of life, reduced pain and opioid use, and lead to cost savings,” authors concluded.

The study’s findings are similar to those reported among enrollees in other states’ medical cannabis programs, including the experiences of patients in IllinoisMichiganMinnesotaNew Mexico, and elsewhere.


For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. Full text of the study, “Preliminary evaluation of the efficacy, safety, and costs associated with the treatment of chronic pain with medical cannabis,” appears in The Mental Health Clinician. NORML’s fact-sheet highlighting the relevant, peer-reviewed research specific to the relationship between cannabis and opioids is available online.