Justice Department reaches first settlement with opioid manufacturer

By Lenny Bernstein and Scott Higham July 11 at 5:10 PM

The Justice Department and Mallinckrodt Pharmaceuticals reached a $35 million settlement Tuesday 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 agreement is the first with a major manufacturer of the opioids that have sparked a crisis of overdoses and addictions across the country. 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,” Attorney General Jeff Sessions said in a statement. “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.”

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