The Department of Justice on Wednesday announced a global resolution of its criminal and civil
investigations into the opioid manufacturer Purdue Pharma. 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 convictions, 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.”

“Purdue’s expansive criminal conduct included paying a kickback in exchange for designing
medical software to influence unwitting physicians,” said Christina E. Nolan, United States
Attorney for the District of Vermont. “Purdue’s drug marketers paid to invade the sanctity of the
physician-patient relationship so that it could influence medical decisions and increase
prescriptions of its most potent opioids. As a Purdue entity is now prepared to plead guilty for a
second time to conduct involving unlawful marketing of highly addictive opioid pills, this
resolution will serve as a reminder that the company put profits before people during the height
of the opioid crisis.”

“For years, Purdue placed profits over patient safety by marketing and selling its dangerous
opioid products to healthcare providers that it had good reason to believe were diverting those
opioids to abusers,” Attorney for the United States Rachael A. Honig, District of New Jersey,
said. “Purdue deceived the DEA about its measures to prevent such diversion, and it used that
deception to gain higher limits on the amount of its products it was legally permitted to
sell. Purdue also paid kickbacks to providers to encourage them to prescribe even more of Purdue’s products. Purdue is in bankruptcy now, but it still must be held responsible for these actions. The resolution we announce today does just that.”

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 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.

In connection with the District of Vermont investigations, Purdue will admit to conspiring to
violate the Federal Anti-Kickback Statute. This is the first prosecution in history charging a
pharmaceutical company for conspiring with an electronic health records (EHR) company to
influence physician prescribing.

From approximately April 2016 through December 2016, Purdue made payments to Practice
Fusion, Inc., an EHR company, in exchange for referring, recommending, and arranging for the
ordering of Purdue’s extended release opioid products—OxyContin, Butrans, and Hysingla.
Purdue and Practice Fusion conspired to create clinical decision support (CDS) alerts embedded
in medical software to increase extended release opioid (ERO) prescriptions. Purdue’s drug
marketers financed the alerts that were presented to physicians as impartial clinical alerts—when
in reality they were merely part of a clandestine unlawful marketing scheme. Purdue’s internal
marketing documents described the key performance indicator of the program as: “Increase in
ERO prescribing.”

As part of the resolution, Purdue will be required to create and host a public and permanent
document repository containing documents relating to the charges and alleged civil violations.
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.
Today’s resolution does not resolve claims that states may have against Purdue nor does it
impede the Debtors’ ability to recover fraudulent transfers.