Purdue Pharma, Executives Plead Guilty To Misbranding OxyContin, Fined $634.5M

Main Category: Pharma Industry / Biotech Industry
Also Included In: Litigation / Medical Malpractice
Article Date: 15 May 2007 - 14:00 PST

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Purdue Pharma and three of the company's current and former executives on Thursday pleaded guilty to misleading the public about the safety of its painkiller OxyContin and agreed to pay $634.5 million in fines, the Los Angeles Times reports. The settlement is one of the largest financial penalties ever imposed on a drug company, according to the Times. The office of the Western District of Virginia, which filed the case against Purdue for practices that occurred between 1996 and mid-2001, said the company made claims that OxyContin was less addictive than other painkillers and less subject to abuse, "despite warnings to the contrary from doctors, the media and members of its own sales force," the Times reports (Zimmerman, Los Angeles Times, 5/11). The company also claimed that OxyContin could be discontinued without feeling symptoms of withdrawal (Appleby/Davis, USA Today, 5/11). "Purdue trained its sales representatives to make false representations to health care providers about the difficulty of exacting oxycodone, the active ingredient, from the OxyContin tablet," according to FDA (Lopes, Washington Times, 5/11).

Purdue said the illegal acts occurred before July 2001, and the company has since changed its marketing practices and increased warnings about the drug. The company in a statement said, "We accept responsibility for those past misstatements and regret that they were made" (USA Today, 5/11). The settlement comes two days after Purdue agreed to pay $19.5 million in fines to 26 states and Washington, D.C., to settle claims that the company promoted the drug for off-label uses (Won Tesoriero, Wall Street Journal, 5/11).

Potential for Abuse
When OxyContin received approval, FDA said that the time-release aspect of OxyContin "is believed to reduce" the drug's potential for abuse. Sales representatives then falsely told doctors that the drug was less addictive and less likely to be abused than other painkillers, even though FDA's statement was not conclusive. Sales representatives also were allowed to draw their own fake scientific charts, which they distributed to physicians to show the safety of the drug, according to federal officials (Meier, New York Times, 5/11). In addition, the company in 1995 learned from focus groups that physicians were concerned about the drug's potential for abuse and, as a result, gave false information to sales representatives to pass on to physicians, U.S. Attorney John Brownlee said (AP/Baltimore Sun, 5/11).

Settlement
Under the settlement, Purdue pleaded guilty to one felony count of fraudulently misbranding a drug. The company will pay $600 million in fines, including $160 million to state and federal health care programs and $130 million to resolve private lawsuits now pending (Los Angeles Times, 5/11). Purdue CEO Michael Friedman, general counsel Howard Udell and former Chief Scientific Officer Paul Goldenheim each will pay a fine ranging from $7.5 million to $19 million. Friedman, Udell and Goldenheim will not serve jail time (Wall Street Journal, 5/11). Purdue in a statement said that the three executives "neither engaged in nor tolerated the misconduct at issue in this investigation" and that they admitted guilt under a legal principle that holds high-level officials accountable for illegal acts by others that occur at their drug companies. The statement continues, "To the contrary, they took steps to prevent any misstatements in the marketing or promotion of OxyContin and to correct any such misstatements of which they became aware" (Johnson, Washington Post, 5/11).

According to Brownlee, "Purdue's claims that OxyContin was less addictive and less subject to abuse and diversion were false" (Bloomberg/Boston Globe, 5/11). Brownlee said the company "unleashed a highly abusable, addictive and potentially dangerous drug on an unsuspecting and unknowing public," adding, "For these misrepresentations and crimes, Purdue and its executives have been brought to justice" (AP/Baltimore Sun, 5/11).

Broadcast Coverage
Several broadcast programs reported on the settlement. Summaries appear below.

• ABC's "World News": The segment includes comments from Brownlee; pharmacist Greg Stewart; Sidney Wolfe, director of Public Citizen's Health Research Group; and OxyContin users (Ross, "World News," ABC, 5/10). Video of the segment and expanded ABC News coverage are available online. ABC's "Brian Ross Investigates" webcast also reported on the case. The webcast is available online. "Brian Ross Investigates" also reported on work by Rudy Giuliani's consulting business, Giuliani Partners, for Purdue Pharma and other pharmaceutical companies. The coverage is available online.
  
  
• American Public Media's "Marketplace": The segment includes comments from Brownlee and Alex Sugarman-Brozan of Prescription Access Litigation (Palmer, "Marketplace," American Public Media, 5/10). Audio and a transcript of the segment are available online.
  
  
• CBS' "Evening News": The segment includes comments from Kim Rice of FDA; former HHS Secretary Joseph Califano; and family members of OxyContin users (Orr, "Evening News," CBS, 5/10). Video of the segment and expanded CBS News coverage are available online.
  
  
• NBC's "Nightly News": The segment includes a discussion with Pete Williams, NBC News justice correspondent, about the case (Williams, "Nightly News," NBC, 5/10). Video of the segment is available online.
  
  
• NPR's "All Things Considered": The segment includes comments from Brownlee and William Masello, assistant chief medical examiner for West Virginia (Zarroli, "All Things Considered," NPR, 5/10). Audio and a partial transcript of the segment are available online.
  

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