US-based Purdue Pharma, makers of painkiller OxyContin agreed to pay $600 million in fines and other payments to resolve the criminal charge of "misbranding" the product, one of the largest amounts ever paid by a drug company in such a case.
Three of its current and former executives pleaded guilty Thursday to criminal charges that it had misled doctors and patients when it claimed the drug was less likely to be abused than traditional narcotics.
The three executives, including its president and its top lawyer, also pleaded guilty to misdemeanor charges of misbranding the drug. Together, they agreed to pay $34.5 million in fines.
The hearing included statements by numerous people who said their lives were changed forever by the addiction potential of OxyContin, a trade name for a long-acting form of the painkiller oxycodone.
OxyContin is a powerful, long-acting narcotic that provides relief of serious pain for up to 12 hours.
Initially, Purdue Pharma contended that OxyContin, because of its time-release formulation, posed a lower threat of abuse and addiction to patients than traditional, faster-acting painkillers like Percocet or Vicodin.
That claim became the linchpin of an aggressive marketing campaign that helped the company sell over $1 billion worth of OxyContin a year.
Purdue Pharma, based in Stamford, Connecticut, heavily promoted OxyContin to doctors like general practitioners, who often had little training in treating serious pain or in recognizing signs of drug abuse.
But 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.
OxyContin is a pure, high-strength version of a long-used narcotic, oxycodone. By 2000, parts of the United States, particularly rural areas, began to see soaring rates of addiction and crime related to use of the drug.
At a news conference Thursday in Roanoke, John L. Brownlee, the United States attorney for the Western District of Virginia, said the impact of Purdue's marketing of OxyContin had resulted in rising crime rates, teenage drug addiction, deaths and other problems.
"The results of Purdue's crimes were staggering," he said.
From 1996 to 2001, the number of oxycodone-related deaths nationwide increased fivefold while the annual number of OxyContin prescriptions increased nearly 20-fold, according to a report by the U.S. Drug Enforcement Administration. In 2002, the DEA said the drug caused 146 deaths and contributed to another 318.
U.S. District Judge James Jones in Virginia placed the company on probation for five years and each of the executives on probation for three years. He also ordered the three to perform 400 hours of community service related to prevention of prescription drug abuse.
Jones said he would have preferred to have the plea agreements call for spending money on education of those at risk of drug abuse and treatment of those who are addicted to OxyContin. But Jones said he would not reject the agreement.
"Many young people mistakenly believe today that prescription drugs are safer than other drugs," Jones said.
The fines are to be distributed to state and federal law enforcement agencies, the federal government, federal and state Medicaid programs, a Virginia prescription monitoring program and individuals who had sued the company. About $5 million will go toward a six-year company program to monitor compliance with the agreement.
Survivors of the victims want the Food and Drug Administration to reclassify OxyContin for use only for severe pain. The drug currently can be prescribed for moderate pain.
Purdue has said it accepted responsibility for its employees' actions and has put in place training and monitoring programs to ensure overpromotion of OxyContin doesn't happen again. But officials objected to any ties between the plea agreement and abuse of the drug.
Many of those who gave statements had spoken at a rally before the hearing.
"One of my main infuriations with that company is that for years they denied there was an epidemic," said Ed Bisch of Palm Coast, Fla.
"The first time I heard the word OxyContin was when I was told my 18-year-old son died of an overdose," said Bisch.
Bisch, who has a Web site called www.oxyabusekills.com, drove to the hearing with two other parents, including Lee Nuss, who held up an urn slightly larger than a pill bottle that she said contained her son's ashes.
"I feel you are legal drug users, nothing more than a large corporate drug cartel," Nuss said addressing the Purdue Pharma contingent.
The coal-mining region of southwest Virginia where the sentencing took place has had a number of oxycodone-related deaths -- 119 from 2003 through 2005, according to the state medical examiner's office.
The guilty plea — by Purdue Frederick, an affiliate of Purdue Pharma — is the latest of a number of cases brought by the Justice Department against pharmaceutical makers that accuse them of misbranding, a broad statute that makes it a crime to put false or misleading information about a drug on its label or in ads, or to promote it for unapproved use.
Some drug industry critics said Thursday that while the fines sent an important message, the amounts were far too low, given the vast profits from OxyContin sales and the problems caused by the drug.
"The damage to the public from these white-collared drug pushers surely exceeds the collective damage done by traditional street drug pushers," Dr. Sidney Wolfe, the director of the health research group at Public Citizen, an advocacy group in Washington, said.
Meantime another drug maker Bristol-Myers Squibb has pleaded guilty to making false statements to a federal agency, ending an unusual criminal case involving its blockbuster blood-thinning drug Plavix.
The case involved accusations that the company had entered a secret deal to head off generic competition to Plavix, its biggest-selling product. The investigation began last summer with a search of the company's Manhattan headquarters by federal agents and it led to the dismissal of the chief executive, Peter R. Dolan.