Pharmacutical Company Pleads Guilty to Fraud involving Marketing Drug OxyContin

Recently Purdue Pharma, together with three company executives, agreed to plead guilty to misleading the public in its marketing approach for the narcotic drug OxyContin. The company also agreed to pay fines and other assessments totalling $600 million dollars in one of the largest criminal penalties ever assessed against a company. According to the New York Times, Purdue Pharma mislead the public into believing that because the narcotic drug OxyContin involved a time release formulation, it involved less risks of addiction than other narcotic drugs. OxyContin is a powerful pain narcotic which lasts up to twelve hours. The drug is highly addictive and must be carefully monitored as a result. Unfortunately at the same time as Purdue Pharma’s extremely aggressive marketing campaign began generating over one billion dollars in sales since the introduction of the drug in 1996, criminal activity involving OxyContin increased.

[B]oth experienced drug abusers and novices, including teenagers, soon discovered that chewing an OxyContin tablet or crushing one and then snorting the powder or injecting it with a needle produced a high as powerful as heroin. By 2000, parts of the United States, particularly rural areas, began to see skyrocketing rates of addiction and crime related to use of the drug.

Even though the company represented to the public that OxyContin was less addictive than other narcotics, internal company documents rejected this assertion.

Federal officials said that internal Purdue Pharma documents show that company officials recognized even before the drug was marketed that they would face stiff resistance from doctors who were concerned about the potential of a high-powered narcotic like OxyContin to be abused by patients or cause addiction.

As a result, company officials developed a fraudulent marketing campaign designed to promote OxyContin as a time-released drug that was less prone to such problems. The crucial ingredient in OxyContin is oxycodone, a narcotic that has been used for many years. But unlike other medications like Percocet that contain oxycodone along with other ingredients, OxyContin is pure oxycodone, with a large amount in each tablet because of the time-release design.

Following a four year thorough investigation by the United State’s Attorney’s office, Purdue Pharma admitted its criminal conduct and concluded that:

“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 my opinion, this pharmaceutical company’s conduct reaffirms the dangers of tort reform and corporate secrecy. Assume that somebody ingested and became addicted to OxyContin believing that its timed release formula involved less risk of addiction than other narcotics. Should the consumer have the right to demand accountability for an addiction or damages directly resulting from the pharmaceutical company’s misrepresentations about OxyContin’s timed release formulation? Probably so.

I can only imagine that this company’s marketing strategy never would have been disclosed had it not been for a pending criminal investigation. In the course of civil litigation, shouldn’t consumers have the right to know whether a corporation lied to them? Based upon the facts set out in the New York Times article, I believe so.

Most corporations act and behave professionally. However, Purdue Pharma’s conduct shows all of us why we simply cannot assume that all companies will act fairly and responsibly toward consumers and shareholders. I hope consumers use this case as an important example about why we should reject tort reform and corporate secrecy. What do you think?