By Carrie Johnson
Washington Post Staff Writer
Friday, May 11, 2007
The manufacturer of the potent painkiller OxyContin and three current and former executives at the company yesterday pleaded guilty to falsely marketing the drug in a way that played down its addictive properties and led to scores of people becoming addicted, prosecutors said.
The Purdue Frederick Co. and its chief executive, top lawyer, and former medical chief agreed to pay a total of $635 million to resolve charges filed by the U.S. attorney in the Western District of Virginia, who called OxyContin "one of our nation's greatest prescription-drug failures."
"Even in the face of warnings from health-care professionals, the media and members of its own sales force . . . Purdue continued to push a fraudulent marketing campaign," U.S. Attorney John L. Brownlee said.
The drugmaker knew as early as 1995 that health professionals feared the addictive potential of OxyContin, an opium derivative, but looked the other way, according to court papers. From 1996 to 2001, Purdue claimed that the "miracle drug" was safer than rival medications despite repeated studies that suggested patients had developed a risk of abuse and had serious trouble withdrawing from OxyContin. Purdue collected $2.8 billion through sales of OxyContin during that time, court papers said.
In one instance, supervisors decided against sharing information about difficult OxyContin withdrawal out of fear that it would "add to the current negative press," according to documents presented in an Abingdon, Va., courtroom yesterday.
"Purdue put its desire to sell OxyContin above the interests of the public," Assistant U.S. Attorney General Peter D. Keisler said.
OxyContin, the trade name for oxycodone, is a time-released pill that when crushed and ingested gives users a powerful high. The medication was designed as a less dangerous alternative to morphine for people with cancer and chronic pain. But it has proved deadly for consumers and vexing for law enforcement officials, who bemoan the rise in home burglaries and pharmacy break-ins connected to the spread of a drug sometimes called "hillbilly heroin."
In a 2002 report, the Drug Enforcement Administration traced 142 deaths to OxyContin overdose and said the drug contributed to another 318 fatalities. The DEA said the number of deaths related to the substance rose 400 percent from 1996 to 2001.
Under the terms of the plea deal, Purdue pleaded guilty to a single felony count and agreed to pay $470 million to the government and $130 million more to settle civil claims over injuries and deaths. Virginia will receive nearly $5.3 million to fund health-care fraud investigations and $20 million to fund a prescription drug monitoring program.
Purdue chief executive Michael Friedman, chief legal officer Howard R. Udell and former head of research Paul D. Goldenheim each pleaded guilty to one misdemeanor charge. The men, who will not serve prison time, together will pay about $35 million under the terms of the agreement. Friedman and Udell remain with the company, which is based in Stamford, Conn., while Goldenheim works with health-care start-up businesses, Purdue said.
In a statement, Purdue distanced the executives from the fraudulent marketing messages disseminated to thousands of physicians and pharmacies over the past decade. The company said that the men admitted guilt under a legal principle that holds high-level officials accountable for the improper acts of others at a drug company.
The current and former officials who pleaded guilty "neither engaged in nor tolerated the misconduct at issue in this investigation," the statement said. "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."
Legal experts said proving that drug company officials intended to deceive consumers is a difficult burden for the government. But one health-care advocate criticized the settlement as toothless, given the estimated $9.6 billion in OxyContin sales between 2000 and last year.
Sidney M. Wolfe, director of Public Citizen's Health Research Group, said in a written statement that the government should have pressed Purdue to forfeit more money it made off the drug.
"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?" Wolfe said.
Since 2002, Purdue has been a client of Giuliani Partners, the consulting firm headed by former New York City mayor and Republican presidential candidate Rudolph W. Giuliani. Giuliani, who was one of Purdue's lawyers in the case through his law firm, Bracewell & Giuliani, met with government lawyers more than half a dozen times and helped strike an agreement in principle to settle the case in October, people involved in the case said.
The crackdown on abuse of OxyContin was on display earlier this year at the courthouse in Alexandria, where prominent pain doctor William E. Hurwitz was convicted on drug-trafficking charges.
Hurwitz, a major figure in the growing field of pain management who was once profiled on "60 Minutes,'' was convicted on 16 counts of drug trafficking. Prosecutors contended that Hurwitz prescribed excessive amounts of oxycodone and other dangerous narcotics -- in one instance more than 1,600 pills a day -- to addicts and others, some of whom then sold the medication on a lucrative black market.
That case is part of an ongoing investigation into doctors, pharmacists and patients suspected of selling potent narcotics and fueling an epidemic that ravaged Appalachia and triggered other crimes.
Staff writer Jerry Markon contributed to this report