Kentucky Attorney General Jack Conway has settled a lawsuit with Purdue Pharma, the manufacturer of OxyContin, for $24 million. AG Conway also settled a suit with Johnson & Johnson over their drug Risperdal for $15.5 million. Neither company admits to any wrongdoing in the settlements.
AG Conway stated that, “[t]hese companies engaged in reckless behavior that put our citizens at risk. Both companies knowingly and aggressively marketed drugs they knew to be harmful in order to drive profits. I am pleased we were able to recover damages for the Commonwealth and recover funds to help expand addiction treatment in Kentucky.”
Purdue Pharma
Kentucky initially filed the lawsuit against Purdue Pharma in 2007, accusing Purdue Pharma of marketing the prescription painkiller as “nonaddictive,” since it slowly released doses of the drug over a period of twelve hours. However, if the pill was crushed, it lost its time-release qualities and created an instant high for the user.
Officials also claimed that Purdue Pharma encouraged doctors who were not necessarily trained in pain management to overprescribe the opioid pain reliever to Kentucky patients. The allegations included claims that sales representatives falsely “told doctors that OxyContin wasn’t addictive and was less likely to be abused than other opioid drugs.”
Kentucky officials alleged that the marketing practices led to a wave of addiction and increased medical costs throughout the state. The addiction and increased spending tended to center around eastern Kentucky, where many injured coal miners were prescribed the medicine.
Purdue Pharma will pay Kentucky $12 million followed by another $12 million over the next eight years ($1.5 million each year). By court order, Kentucky is to spend the money from the settlement on addiction treatment programs. In addition to the funds, injunctive relief that was set to expire in 2017 is extended.
This settlement follows a 2007 settlement where Purdue Pharma and three company executives pleaded guilty in Virginia federal court to making misleading claims about the potential for people to become addicted to OxyContin. The judge in that case ordered the company to pay over $630 million. Forty-nine other states settled their own claims against the company that same year; Kentucky was the lone holdout.
Purdue Pharma General Counsel Philip C. Strassburger stated that the company has been working on reducing the abuse of prescription opioids for the past ten years. He believes that the settlement will allow the company to “focus on bringing innovative abuse-deterrent medicines to patients and our other efforts to combat prescription drug abuse and overuse.”
Strassburger emphasized Purdue Pharma’s efforts to reduce opioid abuse, including implementing “industry-leading programs to reduce the abuse and overuse of prescription opioids, including our 2010 reformulation of OxyContin with abuse-deterrent properties.” Purdue Pharma’s efforts can be seen on their website.
This settlement does not take care of the entire case, however. According to AG Conway, the case is “still facing significant legal issues.” The Kentucky Supreme Court is determining whether Purdue Pharma missed a deadline to dispute the facts of the case. A copy of the settlement can be found here.
Johnson & Johnson
Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, marketed Risperdal, a second-generation antipsychotic prescription drug, to children before the Food and Drug Administration (FDA) approved it to do so in 2007. Janssen failed to disclose that Risperdal might cause a hormonal imbalance, resulting in potential breast tissue development and infertility in boys and girls.
Officials alleged that Janssen was aware of the risk and did not update the warning label. Janssen was also alleged to market Risperdal for a non-FDA approved use in treating dementia in non-schizophrenic elderly patients, going so far as to create an elder care sales force, despite having its own study that showed Risperdal doubled the risk of death in the elderly. Janssen pleaded guilty to federal charges of misbranding in 2013 regarding the promotions to the elderly.
In response to the settlement, AG Conway stated, “Going forward, we have tough terms in the settlement that will govern the way Risperdal can be marketed in the future here in Kentucky. It is my hope that the General Assembly will allocate the money to expand addiction treatment in Kentucky.”
In addition to the settlement amount, Janssen is prohibited from “promoting Risperdal for non-FDA approved uses or for populations in which it is not approved.”
A copy of the settlement can be found here.
These cases represent the most recent in the string of cases where Attorneys General have gone after pharmaceutical companies. With the seemingly endless media coverage of prescription drug prices, and the congressional inquiries into the same, it is likely that cases like this will continue into the foreseeable future. A vibrant compliance program and hands-on management can make all the difference in pharmaceutical companies around the country.