Friday, May 11, 2007
$630 million fine for drugmaker
Executives who make OxyContin admitted they hid the drug's dangers.
A pharmaceutical company that touted the wonders of OxyContin while hiding its dark side will pay more than $630 million in criminal penalties for the pain its painkiller inflicted.
Purdue Pharma and three top executives pleaded guilty Thursday of waging an aggressive -- and fraudulent -- marketing campaign for a drug linked to widespread crime, addiction and death.
The fine of $634,515,475 is believed to be the third largest ever assessed against a pharmaceutical company.
After a six-year investigation that spanned the nation, the case culminated Thursday morning in a federal courtroom in far Southwest Virginia, a region that was once an epicenter of OxyContin abuse.
"With its OxyContin, Purdue unleashed a highly abusable, addictive and potentially dangerous drug on an unsuspecting and unknowing public," U.S. Attorney John Brownlee said a few hours later at a news conference in Roanoke.
Explaining how the company overlooked warning signs in its quest for profits, Brownlee called OxyContin "the child of marketeers and bottom-line financial decisionmaking."
When Purdue Pharma introduced the drug in 1995, it claimed to have harnessed a potent opium derivative -- normally reserved for the treatment of severe pain and terminal illness -- with a time-release formula that made it safe for widespread pain management.
The company stuck to that sales pitch, even in the face of evidence that its revolutionary formula was easily defeated by abusers who crushed the tablets and snorted or injected the powder for a heroin-like high.
In documents filed in U.S. District Court in Abingdon, prosecutors outlined three ways in which the drug was "misbranded," the legal term for making false representations through labeling, advertising or statements by company officials:
n Sales representatives dispatched to talk up the drug in visits to doctors' offices across the country falsely told some physicians that OxyContin produced less of a euphoric effect than other painkillers and was thus less prone to abuse.
n The company relied on a study which found that patients taking less than 60 milligrams of OxyContin a day could quit cold turkey with no ill effects -- even after learning that 11 study patients had gone into withdrawal. Purdue Pharma withheld those results out of a concern that it would only "add to the current negative press."
n Sales representatives told doctors that the drug was less likely to be abused than other painkillers and could be used to "weed out" recreational drug users.
As the company's marketing campaign kicked into high gear around 2000, it didn't take long for annual OxyContin sales to go from millions to billions.
"It just seems like you got it prescribed by everybody for everything," said Timothy Jost, a law professor at Washington and Lee University who specializes in heath care law.
The Connecticut-based company pleaded guilty to felony charges Thursday in Abingdon. Also pleading guilty were its president and chief executive officer, Michael Friedman; its chief legal officer, Howard Udell; and its former vice president of medical affairs, Paul Goldenheim.
Although the three executives were spared jail sentences under the plea agreement, they must pay a combined $24.5 million to Virginia's Medicaid fraud unit for their misdemeanor offenses.
As large as the $600 million-plus fine was against the company, the sum amounted for about half of its annual OxyContin sales.
"We have planned for this payment and have accommodated it in our future planning," Purdue Pharma spokesman James Heins said Thursday.
Although such a fine would decimate most Roanoke Valley businesses, Jost said that "for the really large pharmaceutical companies, that's not going to bring them to their knees.
"Usually companies don't settle cases of this magnitude unless they think the bottom line is going to be better off afterward than before," he said.
According to court papers filed Thursday, Purdue Pharma grossed at least $10.2 billion in OxyContin sales from 1995 to 2006 and reaped profits through 2004 of at least $2.8 billion.
In its response to the charges, the company expressed regret for misstatements it made about OxyContin prior to 2001.
"During the past six years, we have implemented changes to our internal training, compliance and monitoring systems that seek to assure that similar events do not occur again," the company's statement read.
Terms of the plea agreement call for an independent monitor to track the company's compliance with Food and Drug Administration guidelines and federal laws.
In response to news accounts of the guilty pleas, Purdue Pharma sought to distance its actions from rampant abuse of its drug. "The company did not admit to any such wrongdoing," a second statement asserted.
Federal authorities expressed hope Thursday that they have put an end to Purdue Pharma's deceptive marketing practices while also sounding an alarm for others.
"The lesson that is to be learned for the pharmaceutical industry is that things plotted in the boardroom, the things they do behind closed doors, will not stay behind closed doors," said Kenneth Jost, assistant director of the Justice Department's Office of Consumer Litigation.
Meanwhile, places like far Southwest Virginia are still grappling with the problems that OxyContin brought.
Some rural counties in the coalfields reported crime increases of more than 100 percent, and the state medical examiner's office in Roanoke has blamed the drug's active ingredient for more that 200 fatal overdoses over the past decade.
What was called an epidemic five years ago is not as bad now, with negative publicity making both prescribers and patients wary of the drug, said John Dreyzehner, co-chairman of the Appalachian Substance Abuse, Prevention and Treatment Coalition.
But abuse of other drugs, such as methadone, is still a major problem for a culture born of OxyContin abuse that places less stigma on misuse of prescription drugs.
"People who would never dream of injecting heroin they had bought on the street from a drug pusher didn't think twice about using OxyContin in the same way," Dreyzehner said.
Most agree that when used appropriately, OxyContin can be a godsend for legitimate pain patients.
"We never wanted to get between a patient and their doctor," Brownlee said. "That's not our role."
As long as Purdue Pharma follows the mandates of its plea agreement, the drug should remain available to those who truly need it, the prosecutor said.
But the way Dreyzehner sees it from his vantage point in Russell County, "Unfortunately, it did probably cause more harm than good for this region overall."