Purdue Pharma Pleads Guilty to Criminal Misbranding, $600M Fine, Zero Executives Jailed

On May 10, 2007, Purdue Pharma pleaded guilty to a felony charge of illegally misbranding OxyContin in an effort to mislead and defraud physicians and agreed to pay $600 million—representing approximately 90 percent of OxyContin profits during the offense period. The company admitted to misleading the public about OxyContin’s risk of addiction in what was then one of the largest pharmaceutical settlements in U.S. history.

Executives Plead Guilty, Face No Prison Time

The company’s president Michael Friedman, top lawyer Howard R. Udell, and former chief medical officer Paul D. Goldenheim pleaded guilty as individuals to misbranding charges—a criminal felony—and agreed to pay a total of $34.5 million in fines. All three executives were sentenced to 400 hours of community service in drug treatment programs. None received any prison time.

The judge found that based on the facts, prison was not appropriate, establishing a precedent of impunity that would define corporate accountability failures throughout the opioid crisis.

Establishing the Impunity Pattern

This 2007 guilty plea became the foundational case establishing that pharmaceutical executives could knowingly mislead doctors and patients about addictive drugs, contribute to a public health catastrophe killing hundreds of thousands of Americans, plead guilty to felony charges, and face zero prison time.

The settlement was controversial even at the time. Congressional hearings in July 2007 questioned “the propriety and adequacy of the OxyContin criminal settlement,” with lawmakers expressing concern that the lack of prison sentences would fail to deter future corporate misconduct.

Scale of Harm Already Known

By 2007, the opioid crisis’s devastating impact was already clear. OxyContin had been aggressively marketed since 1996 based on false claims about addiction risk. Deaths from prescription opioid overdoses had been rising steadily throughout the 2000s. Yet the Justice Department chose a settlement that allowed executives to avoid prison entirely.

Precedent for Future Failures

This case established the template for future opioid-related prosecutions: companies plead guilty or settle, pay large fines that represent a fraction of profits, and executives face no personal criminal consequences. This pattern repeated in:

• The 2020 DOJ Purdue settlement ($8.3 billion, no executive prosecutions)
• The 2022 national settlement with distributors ($26 billion, no executive prosecutions)
• Multiple state settlements (billions in payments, no executive prosecutions)

Death Toll Continues to Mount

Between 2007 and 2020, opioid-related deaths continued to accelerate, with approximately 500,000 Americans dying from opioid overdoses between 2000 and 2020. The 2007 guilty plea did nothing to prevent these deaths—and the lack of personal accountability for executives arguably emboldened continued corporate misconduct throughout the pharmaceutical industry.

This case represents one of the most consequential accountability failures in American corporate criminal justice history, establishing that even guilty pleas to felony charges resulting in hundreds of thousands of deaths would not result in prison time for pharmaceutical executives.