Makers of OxyContin Slapped with $600 Million Penalty

Today, the dangers of addiction and abuse associated with the powerful narcotic <"">OxyContin are well-established and well-known. However, when the drug was introduced to the market 11 years ago by Purdue Pharma and its parent, Purdue Frederick Co., it was billed by the company as a safer alternative to other painkillers such as Percocet and Vicodin less likely to lead to addiction, abuse, or difficult withdrawal symptoms.

With those dubious claims now fully debunked, Purdue Frederick today pleaded guilty to felony misbranding with “intent to defraud and mislead” in a Virginia federal court, while three of its top executives pleaded guilty to misdemeanor misbranding. The result of their guilty pleas will be a total of $634 million in fines and other punitive payments.

In a statement, Purdue Pharma said: “Nearly six years and longer ago, some employees made, or told other employees to make, certain statements about OxyContin to some healthcare professionals that were inconsistent with the FDA-approved prescribing information for OxyContin and the express warnings it contained about risks associated with the medicine. The statements also violated written Company policies requiring adherence to the prescribing information. The misstatements were made prior to July 2001 and related to the risks of addiction, abuse, withdrawal, and tolerance compared to other pain medications. We accept responsibility for those past misstatements and regret that they were made.”

In fact, the company instituted a major marketing blitz for OxyContin between 1996 and 2001, highlighting the drug’s “time-release” capabilities and claiming that the time-release formula made the drug less dangerous in terms of addiction and abuse. Sales of OxyContin, which consists purely of the narcotic oxycodone and the time-release mechanisms, reached more than $1 billion per year at its peak. At the time, the U.S. Food and Drug Administration (FDA) did not fully support the drug maker’s claims, not did it fully reject them either. Basically, the FDA allowed Purdue to “theorize” that the drug’s time-release formula would increase its overall safety, but did not allow them to make that claim outright.

According to an FDA announcement earlier today, “An investigation by OCI [Office of Criminal Investigations] uncovered an extensive, long-term conspiracy by The Purdue Frederick Company, Inc. to generate the maximum amount of revenues possible from the sale of OxyContin through various illegal schemes. To further this goal, Purdue trained its sales representatives to make false representations to healthcare providers about the difficulty of extracting oxycodone, the active ingredient, from the OxyContin tablet; trained its sales force to represent to healthcare providers that OxyContin did not cause euphoria and was less addictive than immediate-release opiates; and allowed health care providers to entertain the erroneous belief that OxyContin was less addictive than morphine. In addition, Purdue falsely labeled OxyContin as providing ‘fewer peaks and valleys than with immediate-release oxycodone,’ and by representing that ‘…delayed absorption as provided by OxyContin Tablets is believed to reduce the abuse liability of the drug.’”

In a prepared statement, Assistant Attorney General Peter Keisler added, “Purdue put its desire to sell OxyContin above the interests of the public. Purdue abused the drug approval process which relies on drug manufacturers to be forthright in reporting clinical data and, instead, misled physicians about the addiction and withdrawal issues involved with OxyContin.”

Under the terms of the settlement, Purdue Frederick will pay $470 million in fines to state and federal governments, while an additional $130 million will be earmarked for the settlement of civil suits against the company. The three guilty executives will also be penalized: Michael Friedman, the company’s president, will pay $19 million in fines; Howard R. Udell, its lead attorney, will pay $8 million; and Dr. Paul D. Goldenheim, its former medical director, will pay $7.5 million. With regard to OxyContin, Purdue has already paid out more than $200 million in civil settlements and nearly $20 million in fines to numerous state agencies.

Not everyone believes the penalties are stringent enough because OxyContin has generated $9.6 billion in retail U.S. sales from 2000 to 2005. “The government should have forced the company to disgorge far more of its ill-gotten profits in this case,” said watchdog Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group. “Hundreds of thousands of people are languishing in jail for relatively minor drug possession or distribution crimes involving illegal drugs or, in a smaller number of cases, prescription drugs such as OxyContin. Why have the three wealthy Purdue executives, who have pleaded guilty to orchestrating this dangerous promotional campaign, escaped jail time, and why are they paying merely $34.5 million in penalties?”

This entry was posted in Legal News. Bookmark the permalink.

© 2005-2016 Parker Waichman LLP ®. All Rights Reserved.