- As part of a more than $8 billion settlement with the U.S. Department of Justice, Purdue Pharma will plead guilty to one count of conspiracy to defraud the U.S. government and two counts of violating anti-kickback, or bribery, laws.
- Because Purdue filed for bankruptcy last year, that full figure likely won’t be collected by the government.
- Under the settlement, which will need approval in bankruptcy court, Purdue would become a public benefit corporation that is controlled by the government, with revenue from opioid sales being used to fund treatment options and programs.
- A number of state attorneys generals and Democratic lawmakers have said the settlement does not hold Purdue or its owners fully accountable and could derail thousands of other cases against the company.
- They have also argued that the government should “avoid having special ties to an opioid company… that caused a national crisis.”
Purdue to Plead Guilty to 3 Criminal Charges
The Justice Department announced Wednesday that Purdue Pharma has agreed to plead guilty to three criminal charges related to fueling the country’s opioid epidemic.
Notably, those guilty pleas come as part of a massive settlement worth more than $8 billion, though Purdue will likely only pay a fraction of that amount to the government.
Purdue is the manufacturer of oxycontin, which is a powerful and addictive painkiller that’s believed to have driven the opioid crisis. Since 2000, opioid addiction and overdoses have been linked to more than 470,000 deaths.
As part of the settlement, Purdue will plead guilty to one count of conspiracy to defraud the United States. There, it will admit that it lied to the Drug Enforcement Administration by claiming that it had maintained an effective program to avoid opioid misuse. It will also admit to reporting misleading information to the DEA in order to increase its manufacturing quotas.
While Purdue originally told the DEA that it had “robust controls” to avoid opioid misuse, according to the Justice Department, it had “disregard[ed] red flags their own systems were sending up.”
Along with that guilty plea, Purdue will also plead guilty to two anti-kickback, or bribery, related charges. In one charge, it will admit to violating federal law by paying doctors to write more opioid prescriptions. In the other, it will admit to using electronic health records software to increase opioid prescriptions.
According to a copy of the plea deal obtained by the Associated Press, Purdue “knowingly and intentionally conspired and agreed with others to aid and abet” the distribution of opioids from doctors “without a legitimate medical purpose and outside the usual course of professional practice.”
The $8 billion in settlements will be split several different ways.
In one deal, the Sackler family — which owns Purdue — will pay $225 million to resolve civil fines.
As part of the main deal, another $225 million will go directly to the federal government in a larger $2 billion criminal forfeiture; however, the government is actually expected to forego the rest of that figure.
In addition to that, $2.8 billion will go to resolving Purdue’s civil liability. Another $3.54 billion will go to criminal fines, but because Purdue filed bankruptcy last year, these figures also likely won’t be fully collected — largely because the government will now have to compete with other claims against Purdue in bankruptcy court.”
Purdue Will Become a “Public Benefit Company”
Since Purdue is in the middle of bankruptcy proceedings, a bankruptcy court will also need to approve the settlement.
“The agreed resolution, if approved by the courts, will require that the company be dissolved and no longer exist in its present form,” Deputy Attorney General Jeffrey Rosen said.
However, that doesn’t mean that Purdue’s fully gone or that it will even stop making oxycontin. In fact, as part of this settlement, the Sacklers would relinquish ownership of Purdue, and it would then transform into what’s known as a public benefit company.
Essentially, that means it would be run by the government. Under that setup, money from limited oxycontin sales, as well as from sales of several overdose-reversing medications, would be pumped back into treatment initiatives and other drug programs aimed at combating the opioid crisis.
For its part, the Justice Department has endorsed this model.
Should Purdue Be Punished More?
There has been strong opposition to this deal, mainly from state attorneys general and Democratic members of Congress who say it doesn’t go far enough.
Those critics argue that the settlements don’t hold Purdue or the Sackler family fully accountable, especially the Sacklers since — unlike Purdue — they didn’t have to admit any wrongdoing.
“[W]hile our country continues to recover from the pain and destruction left by the Sacklers’ greed,” New York Attorney General Letitia James said, “this family has attempted to evade responsibility and lowball the millions of victims of the opioid crisis. Today’s deal doesn’t account for the hundreds of thousands of deaths or millions of addictions caused by Purdue Pharma and the Sackler family.”
“If the only practical consequence of your Department’s investigation is that a handful of billionaires are made slightly less rich, we fear that the American people will lose faith in the ability of the Department to provide accountability and equal justice under the law,” A coalition of 38 Democratic members of Congress said in a statement to Attorney General Bill Barr last week.
While this settlement doesn’t include any convictions against the Sacklers specifically, as the Justice Department noted, it also doesn’t release them from criminal liability and a separate criminal investigation is ongoing.
Still, last week, 25 state attorneys general asked Barr not to make a deal that includes converting Purdue into a public benefit company, urging the Justice Department to “avoid having special ties to an opioid company, conflicts of interest, or mixed motives in an industry that caused a national crisis.”
Part of their concern is that the government would essentially run this new company while also holding the original one accountable. Those attorneys general instead argued that Purdue should be run privately but with government oversight.
See what others are saying: (Associated Press) (The New York Times) (Fox Business)
As Unemployment Claims Rise, CA Officials Report Inmates Collected Millions in Benefits
- Unemployment numbers spiked for the second week in a row, marking the highest amount of new claims made since early October with 778,000 people filing. Over 20 million Americans are still collecting some kind of joblessness aid.
- Experts say this will only get worse as COVID cases continue to rise and states impose more restrictions. However, unlike during the spring shutdowns, struggling Americans and small businesses will likely not have any help from the federal government.
- Meanwhile, law enforcement officials in California reported that tens of thousands of inmates received upwards of $1 billion in unemployment benefits as part of a scam that officials described as “the most significant fraud on taxpayer funds in California history.”
Unemployment Numbers Spike
Another 778,000 Americans filed for unemployment this week, the Department of Labor reported Wednesday, marking the highest spike since early October and the second week in a row that new claims have risen.
According to experts, this data signals that the massive coronavirus spikes the U.S. has seen in recent weeks are slowing the economy once again. On Wednesday, the country reported a record 2 million new cases in the same two weeks that joblessness claims also went up, bringing the official case count to more than 12.6 million Americans infected and over 260,000 dead.
As the COVID-19 spikes continue, and with more state and local governments imposing new restrictions on public gatherings, limiting hours and operations for restaurants and bars, and temporarily closing down some businesses entirely, economists say this situation will get worse before it gets better.
Unlike the first wave of shutdowns this past spring, it seems almost certain that struggling Americans will have to weather these latest closures without any help from the government.
Already, many of the programs that gave trillions of dollars to unemployed Americans and small businesses under the CARES Act have expired, and most of the few remaining programs will run out soon.
That is especially concerning when it comes to unemployment benefits. According to a recent report from the progressive think tank The Century Foundation, unless Congress and the White House sign off on a deal to extend key programs, roughly 12 million Americans will lose these benefits entirely the day after Christmas.
But after months of deadlock, any hopes for a new stimulus package petered out when the election came around. Democratic leadership is reportedly attempting to restart those talks, and Senate Majority Leader Mitch McConnell (R-Ky.) has said he wants to approve some kind of bill before the end of the year.
However, it remains unclear how all the problems that had deadlocked the lawmakers for months during the earlier negotiations will be resolved in time.
Inmate Unemployment Fraud
Meanwhile, states are still continuing to struggle with distributing unemployment benefits to jobless Americans.
On Tuesday, a task force lead by nine district attorneys across the state of California reported in a letter to Gov. Gavin Newsom (D) that tens of thousands of prison and jail inmates — including more than 100 people on death row — have collected hundreds of millions of dollars in unemployment benefits as part of a scam that the officials say “appears to be the most significant fraud on taxpayer funds in California history,”
According to the task force, between March and August, inmates housed in every single California prison and in jails throughout the state filed 35,000 claims totaling at least $140 million in benefits, though the alleged crimes could total as much as $1 billion.
In most cases, officials said that the payments were given out in the form of prepaid debit cards sent to friends or family on the outside who would then later deposit the proceeds to inmate accounts.
In some cases, the joblessness benefits were sent directly to the jails and prisons. Sometimes the inmates used their real names, but other times, they used fake names and fake Social Security numbers.
In fact, prosecutors were tipped off to some of the cases by listening to inmates recorded phone calls, where they bragged about how easy it was the game the system.
As far as how such widespread fraud could happen, law enforcement officials blamed California’s Employment Development Department, which has been swamped with processing more than 16.4 million unemployment claims since March, resulting in a massive backlog of unfilled claims that, according to reports, has totaled upwards of more than 1.6 million people at times.
However, the task force also said that part of the problem was due to the fact that unlike at least 35 other states, California does not have the technology to crosscheck inmate rosters against unemployment claims.
In their letter, the officials called on Newsom to crack down on the rampant fraud and provide “significant resources” to do so.
Newsom, for his part, responded in a statement by calling the fraud “absolutely unacceptable,” and ordering the Office of Emergency Services to create a task force to help the prosecutors with their investigation.
However, as The New York Times pointed out, Newsom had already formed a “strike team” a few months ago to help the state’s employment department speed up claims and address other issues, including fraud at correctional facilities.
The district attorneys were still forced to form their own task force with the California Department of Corrections and Rehabilitation after the reports of fraud in the employment department continued and the “strike team” failed to uncover the large amounts of fraud the other groups had seen.
Currently, it is unclear how Newsom’s new task force is different from the largely unsuccessful “strike team.”
These problems also go beyond unemployment. There have been frequent reports of CARES Act funding being misused, including by people using small business loans to buy luxury cars, as well as large companies or businesses connected to President Donald Trump Trump and members of Congress improperly receiving funding.
As Congress considers another much-needed stimulus package, these issues of transparency and accountability have now become paramount.
See what others are saying: (The New York Times) (NBC News) (USA Today)
COVID-19 Cases Expected To Surge After Thanksgiving
- With coronavirus cases already on a steep rise in the U.S, experts are warning that Thanksgiving travel and gatherings will likely make things worse. Canada, for example, saw a jump in cases after its citizens celebrated the holiday last month.
- Surgeon General Jerome Adams said that Americans should hold out for a vaccine, which is on the horizon, and be safe this Thanksgiving.
- A family in Texas is also waring against gathering, saying they learned how dangerous it is the hard way. After celebrating a birthday together, all 15 people who attended the party tested positive for the virus.
- On top of this experts are also warning against thinking a negative test clears you for socialization. In reality, you can test negative for the virus and still have and transmit it.
Warning From Surgeon General
As Thanksgiving looms closer, warnings against family gatherings are being echoed by experts and everyday people alike.
Health officials have been vocal about the threat the Thanksgiving holiday poses when it comes to the coronavirus. The U.S. has seen 12.4 million cases and lost 257,000 lives to the virus, and cases have been on a steep increase this month. The CDC has already warned against travel and experts have said that based on the spike Canada saw after its October Thanksgiving, America is set to go down a similar, or even worse path.
“I want the American people to know that we are at a dire point in our fight with this virus by any measure,” U.S. Surgeon General Jerome Adams said Monday on Good Morning America. “Cases, positivity, hospitalizations, deaths. We’re seeing more Americans negatively impacted than ever before.”
Adams said that with a vaccine on the horizon, Americans should just wait out this homestretch and stay put for the holiday.
“I’m asking Americans, begging you, hold on just a little bit longer,” he said. “Keep Thanksgiving and the celebration small and smart this year.”
Family in Texas Urges Caution
Health officials are not the only ones preaching this advice. In Arlington, Texas, a family that has lived the consequences of gathering without regard for public health is urging people to not make the same mistake as them. The Aragonez family celebrated a birthday earlier this month indoors without masks or distancing. Now, all 15 people who attended tested positive for the virus.
“We feel guilty for gathering,” members of the family said in a video encouraging caution. “All this pain that my family is feeling, this loneliness, this sickness, this longing to be healthy could have been prevented.”
“Please don’t be like my family and ignore the CDC guidelines,” one person said. “By staying apart we can fight this virus together.”
While most cases in the family were mild, one person was hospitalized for over a week.
“One moment of carelessness has cost us a month of peace, has cost us sleep, has cost us laughs, has cost us a lot of money,” one family member told the Washington Post.
Testing Negative is Not Enough
Many have still forged on with their gathering plans under the false idea that if everyone tests negative before attending, they are in the clear to socialize. However, experts warn this is far from the case.
Just because a person tests negative does not necessarily mean they do not have the virus. Tests are not 100% accurate and it can take days or even a week to test positive for the virus after exposure. Not to mention, people could come into contract with the virus between their test and the family event.
“A negative result is a snapshot in time,” Dr. Paige Larkin, a clinical microbiologist at NorthShore University HealthSystem in Chicago explaining to the New York Times. “It’s telling you that, at that exact second you are tested, the virus was not detected. It does not mean you’re not infected.”
While it might slightly minimize the risk of spread, it certainly does not eliminate it. More than anything, it gives people a false sense of security that they have a free pass to go wherever and see whoever they want, despite the fact that it still poses a large health threat.
See what others are saying: (New York Times) (Washington Post) (Associated Press)
Over 1 Million People Traveled Through U.S. Airports Friday, Despite COVID-19 Warnings
- Over 1 million people traveled through U.S. airports on Friday, marking the second-highest single day of airport traffic since the coronavirus pandemic began.
- The new record comes despite the fact that the CDC has issued a warning against travel for Thanksgiving, encouraging people to stay home instead because COVID-19 cases are already on a steep rise.
- In Canada, cases spiked after the country celebrated their Thanksgiving holiday in October.
- While cases were already increasing in the country, contact tracing has linked outbreaks to holiday gatherings, which likely accelerated the speed of spread.
Cases and Travel Both Increase
The upcoming Thanksgiving holiday is expected to worsen the already increasing coronavirus outbreak in the United States.
Currently, the country has seen over 12.3 million cases and lost more than 256,000 lives to this virus. On Friday, the U.S. broke its record for new cases in a single day, reporting 198,500 cases. The daily average has reached 171,462 cases a day and roughly one-quarter of all cases in the U.S. have come from just the month of November.
These circumstances paint a grim picture of what could come after all of the traveling and large gatherings that are expected to happen over the holiday, even after repeated warning against doing so.
In fact, the Centers for Disease Control and Prevention has warned against traveling and advised that “postponing travel and staying home is the best way to protect yourself and others this year.”
The CDC told travelers to ask themselves questions, like if cases are high in their home or destination, if their method of travel makes social distancing difficult, and if there are travel restrictions in their area. If the answers to any of those questions are yes, people should “consider making other plans, such as hosting a virtual gathering or delaying your travel.”
Despite these warnings, air travel is on the rise in the country. On Friday, more than 1 million people passed through airports, marking the second-busiest day of air travel since the pandemic began. While this is 1.5 million people less than the same day last year, the travel surge troubles health officials who fear the virus could spread as people gather with their families.
Case Spike After Canada’s Thanksgiving
All the U.S. has to do is look to its neighbor to the North in order to find out just what kind of impact Thanksgiving can have on coronavirus cases. Two weeks after Canada’s Thanksgiving in October, the country saw a spike in cases. While cases were already on the rise at the time, experts believe that holiday gatherings contributed to and accelerated the spread.
“Cases were indeed increasing already, but we definitely saw an increase in the rate of transmission after Thanksgiving. And we know that Thanksgiving is important for a couple of reasons. One is through contact tracing data,” Dr. Laura Rosella, an associate professor and epidemiologist at the University of Toronto told CBS News.
Contact tracing in the country showed a significant transmission from household gatherings stemming from Thanksgiving.
“One local health unit that reported about 12 people being infected because of a Thanksgiving gathering,” Rosella explained.
“It’s not the only reason the cases are increasing, it’s not the only setting in which transmission is occurring, but definitely when people gathered indoors it did transmit COVID.”
Still, people are more likely to feel safe with their family, no matter how high the COVID-19 risk actually is. Superspreading weddings are among the strongest examples of this, as numerous have led to significant outbreaks because couples thought it was safe to gather with friends, family, and other people they trust.
“Many people don’t believe that you can actually catch it from your family and friends. They feel safe when they are around people that they know,” Karen Potts, the director of the Adams County Health Department in eastern Washington explained to NBC News. “And I think that’s why this sort of event happens. People just feel safe, and they go to the event, and it just spreads so rapidly.”
One August wedding in Maine, for instance, was liked to 177 coronavirus cases and 7 deaths. Many of those cases include people who did not attend the wedding. In fact, none of the deaths traced back to the wedding were attendees.
An October wedding in Cincinnati led to 32 of the 83 guests getting COVID-19, including grandparents of the bride and groom. In Washington, a 300 person wedding earlier this month has led to 17 people getting the virus so far.