Purdue Pharma

Purdue Pharma L.P.

Native name	Purdue Pharmaceuticals L.P.
Type	Private
Industry	Pharmaceuticals
Founded	New York, New York, U.S. 1892 (1892)
Founders	John Purdue Gray George Frederick Bingham
Headquarters	Stamford, Connecticut, U.S.
Key people	Dr. Craig Landau (President & CEO) Arthur Sackler Mortimer Sackler Raymond Sackler
Revenue	$3 billion (2017)
Number of employees	5,000 (worldwide)
Website	purduepharma.com (Global website)
Footnotes / references

Purdue Pharma L.P. is a privately held pharmaceutical company founded by John Purdue Gray. It is (or respectively was) owned principally by members of the Sackler family as descendants of Mortimer and Raymond Sackler. In 2007, it paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling of its product OxyContin, and three executives were found guilty of criminal charges. Although the company shifted its focus to abuse-deterrent formulations, Purdue continued to market and sell opioids as late as 2019, and continued to be involved in lawsuits around the opioid epidemic in the United States. Purdue filed for Chapter 11 bankruptcy protection on September 15, 2019 in New York.

On October 21, 2020, it was reported that Purdue had reached a settlement potentially worth $8.3 billion, admitting that it "knowingly and intentionally conspired and agreed with others to aid and abet" doctors dispensing medication "without a legitimate medical purpose." Members of the Sackler family will additionally pay $225 million and the company will close.

History

The company that became Purdue Pharma was founded in 1892 by medical doctors John Purdue Gray and George Frederick Bingham in Manhattan as the Purdue Frederick Company.

In 1952, the company was sold to two other medical doctors, brothers Raymond and Mortimer Sackler, who relocated the business to Yonkers, New York. At the time, Purdue sold staples like earwax remover and laxatives. The Sacklers' older brother, Arthur Sackler held a one-third option in the company, which was sold to his brothers after his death. Under the Sacklers, the company opened additional offices in New Jersey and Connecticut. The headquarters are in Stamford, Connecticut.

The present-day company, Purdue Pharma L.P. was incorporated in 1991, and focuses on pain management medication calling itself a "pioneer in developing medications for reducing pain, a principal cause of human suffering". In September 2015, the company's website said it had some 1,700 people on its payroll.

In September 2015, the company announced it would acquire VM Pharma in the process gaining access to worldwide development and commercial rights to an allosteric selective tropomyosin receptor kinase inhibitor program, i.e., the Phase II candidate VM-902A. The deal could generate more than $213 million for VM Pharma.

The company has never had an affiliation with Purdue University.

Structure

The company's branches include Purdue Pharma L.P., The Purdue Frederick Company, Purdue Pharmaceutical Products L.P., and Purdue Products L.P. The company's manufacturing takes place at three sites: Purdue Pharmaceuticals L.P., a plant located in Wilson, North Carolina, the P.F. Laboratories, Inc. in Totowa, New Jersey, and Rhodes Technologies L.P., in Coventry, Rhode Island. Purdue Pharma L.P. also has research labs in Cranbury, New Jersey. OxyContin is currently distributed throughout the U.S., Canada, and Mexico. Distribution takes place from the P.F. Laboratories in Totowa, New Jersey.

Rhodes Pharmaceuticals is a sister company that was established in Rhode Island in 2007. The company is one of the largest producers of off-patent generic opioids in the US.

Sister companies to Purdue that are also controlled by descendants of Mortimer and Raymond Sackler are Napp Pharmaceuticals in the United Kingdom and Mundipharma that are selling opioids globally.

New drugs are being developed under other company names, such as Adlon Therapeutics and Imbrium. Both are based in the same building as their parent company in downtown Stamford and share employees.

Management

Craig Landau was appointed CEO on June 22, 2017. He joined Purdue Pharma L.P. in 1999 and was chief medical officer and as vice president of R&D innovation, clinical and medical affairs. In 2013, he was appointed president and CEO of Purdue Pharma (Canada).

By 2018, eight members of the Sackler family were listed to be active or former members of the Board of Directors. By early 2019, the Sacklers had left the Purdue Pharma board, leaving none on the panel. Steve Miller became chairman in July 2018 with a board of five members left.

Controversy

Purdue Pharma makes pain medicines such as hydromorphone, oxycodone, fentanyl, codeine, and hydrocodone. It is widely known for the production of drugs such as MS Contin, OxyContin, and Ryzolt. In 1972, Contin (a controlled drug-release system) was developed. In 1984, its extended-release formulation of morphine, MS Contin was released. In 1996, its extended-release formulation of oxycodone, OxyContin was released.

The controversy behind the company emerged as a result of the drugs that they made and how they carried high potential for addiction. The most commonly abused medications that the company produces are MS Contin and OxyContin. Both can be abused by crushing, chewing, snorting, or injecting the dissolved product. These ingestion methods create a significant risk to the abuser; they can result in overdose and death. Drug-seeking tactics that addicts undergo to obtain the medication include "doctor shopping", which is visiting a number of different physicians to obtain additional prescriptions and refusal to follow up with appropriate examinations. Along with the high potential for abuse among people without prescriptions, there is also a risk for physical dependency and reduced reaction or drug desensitization for patients that are prescribed them. Nevertheless, strong analgesic drugs remain indispensable to patients suffering from severe acute and cancer pain.

OxyContin, introduced in 1995, was Purdue Pharma's breakthrough palliative for chronic pain. Under a marketing strategy that Arthur Sackler had pioneered decades earlier, the company aggressively pressed doctors to prescribe the drug, wooing them with free trips to pain-management seminars and paid speaking engagements. Sales soared. The drug was marketed as "smooth and sustained pain control all day and all night" when taken on a 12-hour schedule and as having lower abuse potential than immediate-release oxycodone because of its time-release properties, even though there was no scientific evidence backing that conclusion and the addictive nature of opiates had been known for thousands of years. In these early years, Purdue Pharma was aware of OxyContin abuse, including "reports that the pills were being crushed and snorted; stolen from pharmacies; and that some doctors were being charged with selling prescriptions," according to The New York Times, based on a confidential Justice Department report that was revealed in May 2018. Over a hundred internal company memos between 1997 and 1999 included the words "street value," "crush," or "snort."

At the start of 2000, widespread reports of OxyContin abuse surfaced. The results obtained from a proactive abuse surveillance program called Researched Abused, Diversion, and Addiction-Related Surveillance (RADARS) sponsored by Purdue Pharma L.P. pronounced Oxycontin and hydrocodone the most commonly abused pain medications. In 2012, New England Journal of Medicine published a study that found that "76 percent of those seeking help for heroin addiction began by abusing pharmaceutical narcotics, primarily OxyContin" and drew a direct line between Purdue's marketing of OxyContin and the subsequent heroin epidemic in the U.S.

In 2003, the Drug Enforcement Administration found that Purdue's "aggressive methods" had "very much exacerbated OxyContin's widespread abuse."

A 2016, the Los Angeles Times investigation reported that in many people OxyContin's 12-hour schedule does not adequately control pain, resulting in withdrawal symptoms including intense craving for the drug. The journalists suggested that this problem gives "new insight into why so many people have become addicted." Using Purdue documents and other records, they claim that Purdue was aware of this problem even before the drug went to market but "held fast to the claim of 12-hour relief, in part to protect its revenue [because] OxyContin's market dominance and its high price—up to hundreds of dollars per bottle—hinge on its 12-hour duration."

OxyContin became a blockbuster drug. "Between 1995 and 2001, OxyContin brought in $2.8 billion in revenue for Purdue Pharma." Cumulative revenues had increased to US$31 billion by 2016 and US$35 billion by 2017. According to a 2017 article in The New Yorker, Purdue Pharma is "owned by one of America's richest families, with a collective net worth of thirteen billion dollars". Many US states allege the family is worth more than $13 billion. In response to this and other journalism, photographer Nan Goldin launched the organization P.A.I.N., to pressure museums and other cultural institutions to divest from Sackler Family philanthropy.

In 2018, Purdue Pharma patented a new form of buprenorphine which controls cravings and is used to treat addiction to opioids such as OxyContin.

Oxycontin-related lawsuits

Purdue has been involved in measures against prescription drug abuse, particularly of Oxycontin, an addiction-causing prescription drug which is among the drugs most commonly cited in connection with overdose deaths. In 2001, Connecticut Attorney General Richard Blumenthal issued a statement urging Purdue to take action regarding abuse of Oxycontin. He noted that while Purdue seemed sincere, there was little action being taken beyond "cosmetic and symbolic steps." After Purdue announced plans to reformulate the drug, Blumenthal noted that this would take time and that "Purdue Pharma has a moral, if not legal obligation to take effective steps and address addiction and abuse even as it works to reformulate the drug."

In 2004, the West Virginia Attorney General sued Purdue for reimbursement of "excessive prescription costs" paid by the state. Saying that patients were taking more of the drug than they had been prescribed because the effects of the drug wore off hours before the 12-hour schedule, the state charged Purdue with deceptive marketing. In his ruling the trial judge wrote: "Plaintiff's evidence shows Purdue could have tested the safety and efficacy of OxyContin at eight hours, and could have amended their label, but did not." The case never went to trial; Purdue agreed to settle by paying the state US$10 million(equivalent to approximately $13M in 2021) for programs to discourage drug abuse, with all the evidence remaining under seal and confidential.

In May 2007, the company pleaded guilty to misleading the public about OxyContin's risk of addiction and agreed to pay $600 million (equivalent to approximately $685M in 2021) in one of the largest pharmaceutical settlements in U.S. history. The company's president (Michael Friedman), top lawyer (Howard R. Udell), and former chief medical officer (Paul D. Goldenheim) pleaded guilty as individuals to misbranding charges, a criminal violation and agreed to pay a total of US$34.5 million in fines. Friedman, Udell, and Goldenheim agreed to pay US$19 million, US$8 million and US$7.5 million, respectively. In addition, three top executives were charged with a felony and sentenced to 400 hours of community service in drug treatment programs.

On October 4, 2007, Kentucky officials sued Purdue because of widespread OxyContin abuse in Appalachia. A lawsuit filed by Kentucky then-Attorney General Greg Stumbo and Pike County officials demanded millions in compensation. Eight years later, on December 23, 2015 Kentucky settled with Purdue for $24 million.

In January 2017, the city of Everett, Washington sued Purdue based on increased costs for the city from the use of OxyContin as well as Purdue not intervening when they noted odd patterns of sale of their product, per agreement in the 2007 suit noted above. The allegations say Purdue did not follow legal agreements to track suspicious excess ordering or potential black market usage. The suit says false clinics created by unscrupulous doctors used homeless individuals as 'patients' to purchase OxyContin, then sold it to the citizens of Everett.

The black market sale of the drug out of legal pharmacies based in Los Angeles with distributions points in Everett is also said to be part of the experience of the city according to the suit. No intervention was made by Purdue to contact the DEA for years despite knowing of the practice and the overuse and sale of their product. The suit asks for a yet to be determined reimbursement related to costs of policing, housing, health care, rehabilitation, criminal justice system, park and recreations department, as well as to the loss of life or compromised quality of life of the citizens of Everett directly.

In May 2018, six states—Florida, Nevada, North Carolina, North Dakota, Tennessee and Texas—filed lawsuits charging deceptive marketing practices, adding to 16 previously filed lawsuits by other U.S. states and Puerto Rico. By January 2019, 36 states were suing Purdue Pharma. Massachusetts attorney general Maura Healey complains in her lawsuit that eight members of the Sackler family are "personally responsible" for the deception. She alleges they "micromanaged" a "deceptive sales campaign."

In March 2019, Purdue Pharma reached a $270m settlement in a lawsuit filed by Oklahoma, which claimed its opioids contributed to the deaths of thousands of people.

In August 2019, Purdue Pharma and the Sackler family were in negotiations to settle the claims for a payment of $10-$12 billion. The settlement would include a Chapter 11 filing by Purdue Pharma, which would be restructured as public beneficiary trust and the Sackler Family would give up any ownership in the company. Addiction treatment drugs currently developed by the company would be given to the public cost-free. All profits of Purdue would henceforth go to the plaintiffs in the case. On top of that, the Sackler family would contribute $3 billion in cash. The family would also sell Mundipharma and contribute another $1.5 billion from the sales proceeds to the settlement. However, the Sackler family would remain a billionaire family and would not be criminally charged for contributing to the opioid crisis. On September 2019, the office of the New York Attorney General accused the Sackler family of hiding money by wiring at least $1 billion from company accounts to personal accounts overseas.

In October 2020, Purdue agreed to an $8 billion settlement that includes a $2 billion criminal forfeiture, a $3.54 billion criminal fine, and $2.8 billion in damages for its civil liability. It will plead guilty to three criminal charges, and it will become a public benefit company under a trust that is required to consider American public health. The Sacklers will not be permitted to be involved in the new company.

Bankruptcy

In mid-September 2019, Purdue filed for bankruptcy in White Plains, New York, a few days after reaching a tentative settlement with state and local governments that were suing the company over the cost of the opioid epidemic.

Many states refused the terms of the proposed August 2019 settlement and vowed to pursue further litigation to recover additional money, much of it alleged to be hidden offshore. The states contend the Sacklers knew litigants would be pursuing Purdue's funds and committed fraudulent conveyance. Whether or not a state had chosen to settle mostly fell along party lines, with Republican-led states choosing to settle. Most of the wealth of the Sackler Family is not held in Purdue. States are seeking to hold individual family members personally liable for the costs of the opioid epidemic, regardless of Purdue's bankruptcy.

A December 2019 audit from AlixPartners, hired by Purdue for guidance through Chapter 11 restructuring, said the Sacklers withdrew $10.7 billion from Purdue after the company began to receive legal scrutiny.

See also

• Richard Sackler, former chairman and president of Purdue Pharma
• Timeline of the opioid epidemic

External links

• "An onslaught of pills, hundreds of thousands of deaths: Who is accountable?"
• "The Pharmacist", a Netflix documentary series about the role a Louisiana pharmacist played in exposing corruption behind the opioid addiction crisis.