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OxyContin Maker Agrees To $634 Million Settlement

Labeling of highly addictive drug misled consumers, prosecutors charged

September 17, 2007

OxyContin • West Virginia AG Challenges Anti-Lawsuit Group • OxyContin Maker Agrees To $634 Million Settlement • OxyContin to End Off-Label Promotion

The makers of OxyContin will pay $634 million in an agreement with federal and state governments who accused the company of knowingly and fraudulently misbranding OxyContin, a popular prescription pain medication.

The settlement with Purdue Pharma, LP and its subsidiary The Purdue Frederick Company, Inc., wraps up a four-year investigation by the United States Attorney's Office for the Western District of Virginia, in conjunction with other state and law enforcement agencies.

OxyContin is highly addictive and has been subject to abuse. The company and three top executives were accused of presenting the drug as being less addictive, less subject to abuse, and less likely to cause tolerance and withdrawal problems than other pain medications.

Under the agreement, Purdue agreed that out of the $634.5 million settlement, it would pay $160 million to the federal government and state Medicaid programs to compensate the Medicaid programs for damages caused by the misbranding of OxyContin from 1995 through 2005. OxyContin is an extended-release form of oxycodone.

"Drugs that are mislabeled, misbranded, or cause consumers to be misled can be dangerous and deadly," said Michigan Attorney General Mike Cox. "I am committed to protecting Michigan consumers and recovering the financial restitution our state deserves."

Under the terms of the settlement, the State of Michigan has recovered $3,013,088.09 for the Michigan Medicaid program; $1,440,153.54 of that amount will be paid directly to the State, with the balance going to the federal government to reimburse its share of the Medicaid costs.

“The government and the public have a right to expect responsible conduct on the part of pharmaceutical manufacturers, and my office will not tolerate the abuse of the Medicaid program at taxpayer expense,” said Massachusetts Attorney General Martha Coakley. “The recovery of money damages cannot compensate for the suffering of those individuals and families who have been victims of OxyContin abuse and addiction, but today’s settlement is an important recovery for the Commonwealth’s taxpayers.”

Under the terms of the national civil Medicaid settlement, Purdue has also agreed to the terms of a Corporate Integrity Agreement, which requires the company to submit to strict scrutiny of its marketing and sales practices and will ensure Purdue’s future compliance with all applicable laws and regulations.

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