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Monday, July 22, 2024 | Back issues
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OxyContin Execs Lose Bid|for Re-Entry to Medicare

(CN) - A federal judge upheld a Health Department censure of three former senior drug executives who admitted to misleading the health care industry about the addictiveness of OxyContin while reaping billions in revenues.

Despite "repeated attempts to characterize themselves as innocent third parties," the men were barred from participating in federal health care programs like Medicare and Medicaid for 12 years, U.S. District Judge Ellen Segal Huyell wrote, affirming the penalty handed down by Secretary of the Department of Health and Human Services Kathleen Sebelius.

Purdue Frederick has made close to $3 billion in revenues from the powerful prescription painkiller since it gained approval by the Food and Drug Administration in 1995 as an "around-the-clock painkiller."

OxyContin, a controlled-release form of oxycodone, is classified as a Schedule II controlled substance by the Drug Enforcement Administration, due in part to the medication's potential for abuse and dependence.

Former Purdue Frederick president and CEO Michael Friedman, and executives Paul Goldenheim and Howard Udell pleaded guilty in 2007 to serving as "responsible corporate officers" while their company marketed misbranded drugs with the "intent to defraud or mislead" in violation of the Food, Drug, and Cosmetic Act (FDCA).

Purdue agreed to pay more than $700 million to settle criminal charges and civil liabilities, including $160 million in restitution.

A federal investigation uncovered "extensive efforts on the part of Purdue employees to misbrand OxyContin in an effort to boost sales," Huyell wrote. "These misbranding efforts included statements that patients taking OxyContin did not experience withdrawal symptoms - statements that both plaintiffs and the company now admit were false and misleading."

Purdue also trained its sales representatives to make false representations to health care providers about the difficulty drug abusers would have extracting oxycodone, the active ingredient, for intravenous use.

"Purdue had not submitted any clinical studies to the FDA demonstrating that OxyContin was less addictive or less subject to abuse than other pain medications, but Purdue supervisors and employees, armed with market research, nonetheless began marketing and promoting OxyContin as less addictive and less subject to abuse and diversion than other pain medications," the ruling states. "They continued making such statements, 'with the intent to defraud and mislead,' through June 20, 2001, during which time sales of OxyContin totaled approximately $2.8 billion."

The FDCA authorizes the Secretary of Department of Health and Human Services "to exclude from participation in all federal health care programs any individual or entity convicted of an offense bearing a nexus or common sense connection to fraud or financial misconduct in the delivery of a health care item or service," according to Huyell's 30-page opinion.

"The secretary's decision to exclude plaintiffs from participation in all federal health care programs based on their convictions for misdemeanor misbranding under the 'responsible corporate officer' doctrine is supported by substantial evidence."

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