Purdue Pharma - Top 10 most hated companies:
Neither Honest Nor Trustworthy: The 10 Worst Corporations
The U.S. public holds Big Business in shockingly low regard.
A Harris poll found that less than 15 percent of the population believes each of the following to be "generally honest and trustworthy"
Purdue Pharma: White-Collar Drug Dealers
How does street crime work? You commit the crime, you do the time.
How does corporate crime work? Big Pharma corporation commits a crime and hires a high-paid white-collar crime defense lawyer.
Defense lawyer approaches prosecutor and says, "Let's make a deal." You agree not to prosecute the company. I'll give you a shell company that does little business but has a similar name. That company pleads guilty to the crime. It no longer sells drugs and thus when Medicare lists the shell as a company with which Medicare will not do business, it loses nothing. We turn over a couple of executives. They plead guilty. And you promise no jail time.
You can hold a press conference and say, "We cracked down on corporate crime." And we can get on with our business of making millions of dollars off average people addicted to our opiate of choice.
That's pretty much what came down in 2007 when the Justice Department went after the maker of OxyContin, the addictive pain killer that addicts will die for.
OxyContin offers major benefits for cancer patients and others in chronic pain.
But it's also an easy high for thousands of down and out Americans.
Crush the pill and snort it.
It's like heroin - without the needles. It's big in Appalachia. You don't need to ship it in from overseas. You can get it at your local doctor's office or pharmacy.
Talk to family doctors working in hill country and one of the first issues they raise is Oxy addiction. Abuse is so rampant that some hill doctors have stopped prescribing it. No more break-ins and harassing phone calls from addicts claiming back pain.
In 2007, John Brownlee, the U.S. Attorney in Roanoke, Virginia, charged that "Purdue, under the leadership of its top executives, continued to push a fraudulent marketing campaign that promoted OxyContin as less addictive, less subject to abuse and less likely to cause withdrawal."
"In the process," said Brownlee, "scores died as a result of OxyContin abuse and an even greater number of people became addicted to OxyContin; a drug that Purdue led many to believe was safer, less abusable and less addictive than other pain medications on the market."
Brownlee charged that Purdue officials drafted an article published in a medical journal claiming that OxyContin had less euphoric effect and less abuse potential than short-acting opioids. The company then had its sales representatives distribute the article to healthcare providers.
Said Assistant U.S. Attorney General Peter D. Keisler, Purdue "misled physicians about the addiction and withdrawal issues involved with OxyContin."
Brownlee tried to pin the blame where it rightly belongs - on the company and executives who pushed the drug on an unsuspecting public with claims that it was less addictive than other painkillers.
Emphasis on the word "tried."
If you read the papers, you might now believe that Purdue Pharma, the Stamford, Connecticut-based maker of OxyContin, pled guilty to illegally touting OxyContin. You might believe, as the Los Angeles Times and other newspapers reported, "Purdue Pharma pleaded guilty to one felony count of fraudulently misbranding a drug."
One problem. Purdue Pharma did not plead guilty to this crime. It was Purdue Frederick that pled guilty.
Why is this distinction important? Under federal law, pharmaceutical companies convicted of a felony are automatically excluded from federal insurance programs like Medicare.
The idea behind mandatory exclusions is clean government - if a party commits a serious crime, the federal government shouldn't do business with it.
Unless you are a giant corporation with hundreds of millions of dollars in profits at stake.
Then you get a deal.
In this case, the deal was brokered by Howard Shapiro, a partner at WilmerHale in Washington, D.C. - the lawyer for Purdue Pharma. Shapiro did not return calls seeking comment for this story.
Shapiro offered up Purdue Frederick to plead guilty.
What is Purdue Frederick?
We sent an e-mail off to company spokesperson James Heims.
We asked, "What is the difference between Purdue Frederick and Purdue Pharma?"
He wrote back immediately. "They are independent, associated companies. Please let me know if you have further questions."
Well, yes, we do have further questions. Why did Purdue Frederick plead guilty and not Purdue Pharma? No answer.
We call Mr. Heims. Now he's busy. No response.
So, we turn to the press packet sent out by Heidi Coy, the public affairs representative for U.S. Attorney Brownlee. It's 89 pages. It contains Brownlee's statement, the press release, the information, the agreed statement of facts, the plea agreements with Purdue Frederick, Michael Friedman, the president and CEO, Howard Udell, the company's general counsel, and Paul Goldenheim, the company's former medical director. But it doesn't contain the non-prosecution agreement.
And, not surprisingly, out of the hundreds of mainstream news outlets that carried this story, not one mentioned the non-prosecution agreement. The non-prosecution agreement is the one that protects the companies that make the money.
Purdue Frederick takes the hit. It's the felon. It is excluded from government programs. But so what? We can assume it has little if any government business to lose. (Brownlee says he doesn't know. The company won't return calls.)
The more than 200 other affiliated Purdue Pharma companies scattered around the world and listed in Appendix A of the non-prosecution agreement get off. No felony charge. No exclusion. Business as usual.
Purdue is a privately held, very secretive company controlled by the Arthur Sackler family. Arthur Sackler is the guy who, before he delivered OxyContin, brought to you the marketing for Librium and Valium. Walk on the Mall in Washington and you walk by the Freer Gallery of Art and Arthur Sackler Gallery.
Purdue was very happy with the deal to resolve the OxyContin criminal charge. In a statement, Purdue said, "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 company said that, since 2001, it has cured these problems.
It also insisted that "any attempt to connect the agreed to plea of misbranding by Purdue with abuse and diversion of OxyContin is completely false."
In his statement that he read before the cameras, U.S. Attorney Brownlee said that Purdue Frederick is the "manufacturer and distributor" of OxyContin.
Well, as it turns out, they used to be. No longer. Now, that's Purdue Pharma.
In an interview, Brownlee admitted that Purdue Frederick was chosen to plead guilty because "we didn't want to ban the future sale of the drug."
Had Purdue Pharma been forced to plead guilty, OxyContin would have been excluded from Medicare coverage, he said. "And we didn't want that," Brownlee said.
Actually, it's the company that would have been excluded from Medicare. It's up to the government to decide what this means. Could it have ordered Purdue to let other companies make OxyContin and sell it to Medicare? Yes, it could.
The other document that was not sent out in the press packet was the corporate integrity agreement. This was the agreement that Purdue Pharma entered into and that requires the company to hire an independent monitor to make sure it doesn't engage in future criminal activity.
Brownlee won't give the name of the independent monitor who has been appointed. Why not? He won't say.
The bottom line is that Brownlee prosecuted a case that few other U.S. Attorneys would touch. He proceeded against a powerful privately held and secretive pharmaceutical company with major resources at its disposal. He secured a guilty plea against an entity and three top executives.
As part of the settlement, the company will pay over $600 million in fines, restitution and a civil settlement. The three executives will pay collectively over $34.5 million in penalties.
But in the end, he pulled his punches. Purdue Pharma was not charged. The independent monitor's name has not been made public.
And perhaps most importantly, the executives will not face jail time. Why not?
Brownlee dodges the question.
This irks Sidney Wolfe of Public Citizen's Health Research Group.
Wolfe calls the fines and guilty pleas "an important message to the drug industry that this kind of malicious, death-dealing behavior will not be tolerated."
But the government could have come down much harder on what he calls "white-collar drug pushers."
Wolfe points out that from 2000 through 2006 alone, according to data from Drug Topics, the news magazine for pharmacists, there have been $9.6 billion in retail U.S. sales of OxyContin. It was one of 25 top-selling drugs from 2000 to 2005 - it was the 11th largest selling prescription drug in 2003.
"The government should have forced the company to disgorge far more of its ill-gotten profits in this case," Wolfe says. "Hundreds of thousands of people are languishing in jail for relatively minor drug possession or distribution crimes involving illegal drugs or, in a smaller number of cases, prescription drugs such as OxyContin. 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? The damage to the public from these white-collared drug pushers surely exceeds the collective damage done by traditional street drug pushers. Why do we have such a double standard of justice?"
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