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STATE AND LOCAL ROUNDUP | Iowa misspent $21 million in coronavirus relief funds, audit finds ... California city will launch a pilot program to guarantee income for some residents ... Georgia voters may not know who funded campaigns before casting ballots.
Purdue Pharma, the manufacturer of OxyContin, agreed to plead guilty to criminal charges and pay penalties of roughly $8.3 billion for its role in the opioid epidemic, the U.S. Department of Justice announced Wednesday.
The company pleaded guilty to three felony counts for defrauding the United States and violating an anti-kickback statute by paying doctors to write more prescriptions for its opioid products, including OxyContin. Abuse of prescription drugs was a major driver of the ongoing opioid epidemic, which killed 450,000 people from 1999 to 2018. In 2018, nearly a third of opioid-related deaths involved prescription drugs, according to the Centers for Disease Control and Prevention.
Federal prosecutors claimed that the company had paid doctors, through a corporate speaking program and an electronic health records company, to write more prescriptions for its opioid products, including OxyContin.
“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” Tim McDermott, assistant administrator for the Drug Enforcement Administration, said in a statement. “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.”
The $8.3 billion settlement, billed by the Justice Department as the “largest penalties ever levied against a pharmaceutical manufacturer,” includes a criminal fine of $3.544 billion, criminal forfeiture of $2 billion and a civil settlement of $2.8 billion.
But several state attorneys general who have been waging their own litigation battles against Purdue and other opioid manufacturers criticized the DOJ settlement, saying it lets Purdue and the Sackler family that owns the company off the hook. “A real agreement to resolve these cases would force the Sacklers to pay more and would provide funding to help pay for the treatment and programs people need to get well,” said North Carolina Attorney General Josh Stein, a Democrat.
The ruling does not preclude criminal charges against current or former Purdue employees, including the Sackler family. As part of the settlement, the Sacklers will pay $225 million in civil penalties for their role in pushing sales of OxyContin, including a 2013 marketing campaign “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,” according to the government. Those prescriptions “were unsafe, ineffective, and medically unnecessary, and … often led to abuse and diversion.”
But the family did not admit criminal culpability in the settlement, and said in a statement that they “acted ethically and lawfully...we reached today’s agreement in order to facilitate a global resolution that directs substantial funding to communities in need, rather than to years of legal proceedings.”
Both Purdue Pharma and the Sackler family still face dozens of other lawsuits, including ongoing civil cases by state attorneys general and private claims from families of overdose victims. [New York Times, Washington Post, Associated Press, NBC]
MISSPENT RELIEF MONEY | State officials in Iowa used $21 million in federal coronavirus relief money to help pay for a new accounting system, a misallocation the state auditor said must be corrected by the end of the year if the government wishes to avoid repaying the money. State Auditor Rob Sand and the U.S. Treasury Department’s inspector general last week warned Gov. Kim Reynolds’ administration that the software is not a permissible use of the money. Money from the federal Coronavirus Aid, Relief and Economic Security Act was intended for necessary expenditures incurred as a result of the Covid-19 pandemic. The state justified the software purchase by saying it would assist essential employees, but the auditor noted that the state had contracted for the work in 2019, well before the onset of the pandemic. “These expenditures are not ‘due to the public health emergency,’” Sand wrote in a letter to state officials. [Des Moines Register]
DUI UPTICK | Drunk-driving cases are spiking in at least one Alabama county, an increase that law enforcement officials said could be due to the stresses of the pandemic. The sheriff’s department in Morgan County, located in the north-central part of the state, made 66 DUI arrests in the first nine months of 2020, a 54% increase from the same time period last year. “People are stressed more,” said Mike Swafford, a spokesman for the department. “We’re seeing more cases of domestic violence, people arguing with their neighbors that we attribute to the stress of everyday living during this pandemic.” Increased patrols and road closures could also be contributing to the uptick, he said, though other jurisdictions in the state have reported similar surges in drunk driving arrests. [Associated Press]
GUARANTEED INCOME PILOT | Compton, California will guarantee a basic income to certain low-income families beginning at the end of this year, the city announced this week. The pilot program, called the Compton Pledge, will provide regular cash payments to 800 “pre-verified” residents over a two-year period. Payment amounts will vary but should total “at least several hundred dollars,” though parents with multiple children will receive more, according to the program’s website. The pilot is privately funded and will feature an online payment platform that allows recipients to receive their payments through direct deposit, electronic transfers or prepaid debit cards. Program participants will also have access to no-cost banking and financial, legal and counseling services. The initiative is designed to “challenge the racial and economic injustice plaguing both welfare programs and economic systems,” Aja Brown, the city’s mayor, said in a statement. [CNN]
FINANCIAL NONDISCLOSURE | Georgia campaigns and political action committees will not have to file finance reports until the night before the Nov. 3 election, a change that means voters may have little chance to see who’s funding the candidates they’re voting for. The Georgia ethics commission moved the deadline from the Friday before the election due to an obscure section of the state’s campaign finance law, the commission’s executive secretary told the Atlanta Journal-Constitution. The final pre-election reports are particularly important because large amounts of last-minute funding flow into campaigns in general election years, particularly as Georgia has gained stature as a potential swing state. State candidates and funding committees last filed finance reports at the beginning of this month, detailing who funded their efforts through September. [Atlanta Journal-Constitution]
Kate Elizabeth Queram is a staff correspondent for Route Fifty and is based in Washington, D.C.
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