The Justice Department and Mallinckrodt Pharmaceuticals reached a $35 million settlement to resolve allegations that the company failed to report signs that large quantities of its highly addictive oxycodone pills were diverted to the black market in Florida, where they helped stoke the opioid epidemic, the Washington Post reports. The agreement is the first with a major manufacturer of the opioids that have caused a crisis of overdoses and addictions. The Justice Department said the deal establishes “groundbreaking” new standards that require the company to track its drugs as they flow through the supply chain to consumers in an effort to control the epidemic.
The company had argued that once it passed the drugs to wholesale distributors, it was not responsible for illegal diversion of the painkillers as they were sent to retailers and then pain patients. “The Department of Justice has the responsibility to ensure that our drug laws are being enforced and to protect the American people,” said Attorney General Jeff Sessions. “Part of that mission is holding drug manufacturers accountable for their actions. Mallinckrodt’s actions and omissions formed a link in the chain of supply that resulted in millions of oxycodone pills being sold on the street.” The Post earlier reproted a tentative settlement, pointing to the frustration of investigators with the Drug Enforcement Administration who had spent six years trying to hold Mallinckrodt responsible for its role in the epidemic. At one point, the government calculated that it could have assessed the company $2.3 billion in fines for nearly 44,000 violations of the federal Controlled Substances Act.