Purdue Pharma’s $8B Settlement and Where it Ranks on the List of Largest Manufacturer Fines
Those following the opioid crisis in America are familiar with the name Perdue Pharma, makers of OxyContin. For the last several years, the pharmaceutical manufacturer has been embroiled in state-level lawsuits over its attempt to hide the addictiveness of OxyContin. Now, news has come out that the company has settled at a federal level, to the tune of $8.3 billion for “enabling the supply of drugs without legitimate medical purpose.”
The $8.3 billion fine is one of the largest single fines issued to a manufacturer in history, and it’s likely far short of the total damages the company will pay out over the course of its ongoing legal battles. Some speculate the pharmaceutical manufacturer could pay as much as $10 billion by the time everything concludes.
The $8 billion figure is something to behold. For some, it falls short of an acceptable penalty for 400,000 dead Americans. But where does it rank on the list of largest manufacturer fines? As it turns out, right in the middle.
Big Tobacco — $206 billion
This fine doesn’t apply to any one company; rather, companies under the “Big Tobacco” umbrella: Philip Morris Inc., R. J. Reynolds, Brown & Williamson, and Lorillard. When it was issued, this collective fine was the largest civil settlement in U.S. history: 46 states reached the $206 billion settlement. The fine covered negligent advertising, fraud, and violation of various state consumer protection statutes.
British Petroleum — $20.8 billion
Remember the Deepwater Horizon oil spill? 130 million gallons of crude oil poured into the Gulf of Mexico due to the gross negligence of oil manufacturer British Petroleum (BP). In 2016, British Petroleum was found guilty of criminal manslaughter and environmental crimes, and ordered to pay more than $20 billion. It’s the largest fine ever levied by the Department of Justice.
Volkswagen — $14.7 billion
In 2016, German auto manufacturer Volkswagen was found to have cheated emissions data to make its vehicles pass U.S. emissions standards. In an effort to crack down on environmental abusers, the U.S. levied both civil and criminal penalties against Volkswagen, totaling more than $14 billion.
Anadarko Petroleum — $5.15 billion
Oil and gas producer Anadarko Petroleum was slapped with a fine totaling more than $5 billion after it was found to have circumvented paying fines for environmental damages. This fine is yet another example of crackdown on pollution. The fine was made larger to deter companies from using the same shady practice of spinning out shell companies to absorb fines.
GlaxoSmithKline — $3 billion
Another pharmaceutical manufacturer, GlaxoSmithKline’s fine comes in below Purdue Pharma’s by roughly $5 billion. GlaxoSmithKline misbranded its popular Paxil and Wellbutrin drugs, then hid safety information from the Food and Drug Administration (FDA) to improve the optics of each drug. The case was actually more severe, including fraud and price rigging —claims settled privately.
Toyota Motors — $1.26 Billion
Auto manufacturer Toyota settled with the U.S. Department of Justice to the tune of just over $1.25 billion when it was revealed that the company produced vehicles with safety defects related to unintended acceleration. The fine was the result of a criminal investigation and one of several such investigations into the automotive sector between 2010 and 2014.
While Purdue Pharma’s $8 billion fine ranks high on the list of largest manufacturing fines in history, there are several that still rate above it. It is our hope that the records on this list are never broken, signaling good practices and responsible stewardship in the manufacturing future to come.