Corporate headquarters of Purdue Pharma in Stamford, Conn. Photo: Douglas Healey/AP

The leader of New York state's top financial regulatory agency blasted efforts by Purdue Pharma on Monday to pay out $34 million in bonuses to its employees as part of the company's bankruptcy proceedings, citing the state's ongoing investigation into the opioid industry.

New York Department of Financial Services Superintendent Linda Lacewell urged a federal bankruptcy judge in a letter to reject the company's request, citing the damage done through the country's opioid crisis.

"Every dollar available should be used to recompense victims, and it would be inequitable, to say the very least, if the amount of the estate left to redress the tremendous harm suffered by those victims was diminished because employees were paid large sums upon exceeding expectations in causing that very harm," Lacewell wrote.

The letter was in response to a filing last week from attorneys for Purdue Pharma, which is seeking to pay out $34 million in bonuses for employees who had exceeded their target performance goals.

U.S. bankruptcy Judge Robert Drain of the Southern District of New York is expected to consider the request in October.

Purdue is represented in the bankruptcy proceeding by Eli Vonnegut and Marshall Scott Huebner of Davis Polk & Wardwell. Neither immediately returned a request for comment on Lacewell's letter.

She wrote in the letter to Drain that Purdue should be blocked from awarding any bonuses as part of the bankruptcy proceeding because her agency had recently concluded that the company's actions drove up health insurance costs for consumers in New York to the tune of $2 billion over the past decade.

DFS has since issued subpoenas and other document requests to more than 50 opioid companies, insurers and pharmacy benefit managers in an effort to seek restitution from the industry. Requests have also been made to individual members of the Sackler family, who own Purdue Pharma. The probe is ongoing, Lacewell said.

"Though our inquiry is not yet complete, it appears that various entities made intentional misrepresentations about the safety of opioids, over many years, and that those misrepresentations have helped cause the terrible opioid crisis we are facing as a nation," Lacewell said.

Those misrepresentations, she wrote, appear to have caused a wave of unnecessary opioid prescriptions, fraudulent prescription claims, and treatment for addiction to those drugs. That cost was born by insurance companies, but ultimately trickled down to consumers, according to DFS.

"The cost of that coverage has dramatically risen, in part as the direct result of increasing opioid-related claims," Lacewell wrote.

She labeled the overall amount of $34 million as "excessive" in the letter to Drain, but also said the bonuses shouldn't be allowed because of how they were earned. It could be argued that the performance targets cited by Purdue directly contributed to the opioid crisis, Lacewell wrote.

"The incentive programs under which these bonuses are to be paid might themselves have contributed to the harm suffered by people all over the country, including to the consumers I am duty bound to protect," she wrote.

The letter builds on public statements, and court filings, from other state officials in New York, which is one of many entities suing Purdue Pharma over its alleged involvement in causing, and feeding, the country's opioid crisis.

Gov. Andrew Cuomo criticized Purdue's efforts to award the bonuses in a statement Monday.

"Every penny of this $34 million should go directly to those victimized by this opioid scheme, as well as the taxpayers who have seen their health insurance costs go up to help cover the costs of addiction treatment," Cuomo said.

After Purdue had appeared to grow closer to a global settlement in the range of $10 to $12 billion in the litigation against it from thousands of entities and individuals in recent weeks, New York Attorney General Letitia James appeared, at the time, to throw cold water on the idea.

"A deal that doesn't account for the depth of pain and destruction caused by Purdue and the Sacklers is an insult, plain and simple," James said.

The state's lawsuit against Purdue is ongoing in Suffolk County Supreme Court.

READ MORE:

Consumers in NY Overpaid $2B in Insurance Premiums Because of Opioid Crisis, State Says

AG James Joins Call to Remove Barriers to Treatment for Opioid Use Disorder

NY Judge Allows Opioid Claims to Go Forward Against Sacklers