Purdue Pharma scandal culminates in guilty pleas, fines
I don’t usually recount major news stories without something to add to them, but I feel this one deserves all the press it gets. Maybe shame will help provide the deterrent to these despicable acts that fines of this magnitude appear to lack.
As reported by the New York Times and others, Purdue Frederick, parent of privately held Purdue Pharma will pay the 3rd largest fine for a fraud settlement in US history, some $600M. Its top three execs at the time of the fraudulent sales activities of Oxycontin will pay a combined $34.5 million in fines for their role, although Purdue disclaims the direct involvement of its current and former execs, saying they: “neither engaged in nor tolerated the misconduct at issue in this investigation. 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.” Nevertheless, the fines resulted from guilty pleas on misdemeanor misbranding charges for each of three.
According to the Washington Post, $276 million will be forfeited to the United States, $160 million allocated to federal and state government agencies to resolve false claims for government healthcare programs and $130 million will go to resolving private civil claims. Additional amounts will be paid to the Virginia Attorney General’s Medicaid Fraud Control Unit and the Virginia Prescription Monitoring program.
The fines follow a $19.5 million settlement Purdue Pharma made with 26 states and the District of Columbia this week over allegations it failed to adequately disclose abuse risks posed by Oxycontin. A civil case brought by its insurer was settled in June for $200 million.
Oxycontin was marketed without generic competition by Purdue between 1996 and 2004. Prior to losing market exclusivity Purdue sold about $2B worth of the drug annually. The roughly $855M in fines and settlements of allegations concerning fraudulent marketing of Oxycontin represents one year’s sales of the drug circa 2000.
