David Crow in The FT
Accused of exaggerating the benefits of OxyContin, the company’s owners had a bigger share than realised.
Like many salespeople working in the US pharma industry, Carol Panara had often heard about the legendary bonuses on offer at Purdue Pharma, the maker of the now infamous opioid painkiller OxyContin.
“I remember one of their reps telling me you could make $40,000 or $50,000 a quarter in bonuses,” she recalls. “I thought, ‘Wow, there are actually companies paying that kind of money, why can’t I find something like that?’ I had two kids that were getting ready to go to college. It sounded as if it was too good to be true.”
In 2008, Ms Panara decided to quit her job at Novartis, the Swiss drugmaker, and join Purdue, a career move that has since become the source of bitter regret. Over lunch at a diner in Medford, New Jersey, she recounts how she became concerned about the tactics Purdue used to grow sales of OxyContin, a drug that has been blamed for sparking the US opioid crisis.
Ms Panara claims she and her colleagues were instructed to boost sales of OxyContin — a potent and addictive painkiller — by aggressively targeting inexperienced doctors while underplaying the risks of abuse.
“I feel bad that the company was so blasé, so negligent about taking responsibility,” says Ms Panara, who left in 2013, and who was last year subpoenaed by the state attorney-general in New Jersey. “I feel they misled the public, they misled the doctors, and they misled their salespeople.”
The actions of Ms Panara and her colleagues at Purdue have become central to the legal case that prosecutors are now building against the company. There are more than a thousand lawsuits brought by states and local governments in the US alleging the drugmaker’s marketing practices ignited and then fuelled the opioid crisis, which claimed more than 42,000 lives in 2016.
The litigation, which is expected to reach court early next year, is designed to extract hundreds of millions of dollars from the company and its owners, the billionaire Sackler family. Public officials say they need the cash to help offset the bill for the health epidemic, which was recently pegged at $79bn per year by the US Centers for Disease Control and Prevention.
Purdue’s defence will not be helped by the revelation in the FT that the Sackler family also owns one of the biggest generic producers of opioids — little-known Rhodes Pharma.
In a statement, Purdue said: “In 2007, the company accepted responsibility for the actions of certain Purdue supervisors and employees in connection with marketing OxyContin before that time. We paid a significant fine as well as a heavy price in terms of the public trust. To suggest that we did not substantially change our practices is simply wrong.”
Ms Panara was not mistaken about the bumper pay packets on offer at Purdue. In one quarter of 2009, she earned a bonus of more than $16,000, according to a payslip seen by the FT, while her total annual package easily outstripped $100,000. Nor was she among the highest earners, like the sales reps from Florida and other lucrative states — known as the “toppers” internally — who were rewarded with luxury trips to Hawaii and the Caribbean, she says.
However, almost as soon as she joined, she says she felt queasy about the company’s ethics. For a start, she claims her managers played down Purdue’s 2007 settlement with the US Department of Justice, which saw it plead guilty to criminal charges of misleading regulators and doctors over the addictive properties of OxyContin. “They said, ‘We were sued, they accused us of mis-marketing, but that wasn’t really the case. In order to settle it and get it behind us we paid a fine,’” she says. “You had the impression they were portraying it as a bit of a witch hunt.”
The 2007 plea deal did little to stem Purdue’s blistering growth rate. In the following two years, the drugmaker regrouped, hiring more than 100 new sales reps to boost revenues from OxyContin; by 2010, the medicine was pulling in more than $3bn a year. One Purdue executive says: “They did not listen to their critics and insisted they had just a few isolated problems. After the settlement, they didn’t change — the way the sales force was managed and incentivised, everything stayed the same.”
Andrew Kolodny, an academic at Brandeis University and an expert on the addiction epidemic, says Ms Panera’s experiences are “critically important” because they show it was “business as usual” at Purdue following the 2007 settlement. “The bulk of what Purdue has done to cause this epidemic stems from their promotion of the drug as safe and effective for chronic pain,” he says. “All of that continued after the plea deal, and the result was they paid a fine but there was no significant change in their behaviour.”
Lawyers working on the current legal effort against Purdue say the question of whether the company reformed itself after the plea deal could become a critical issue in the forthcoming court cases. That is because the deal included a non-prosecution agreement stating “there will be no further criminal prosecution or forfeiture action by the United States for any violations of law, occurring before May 10, 2007”. If prosecutors want to impose new penalties, they will have to show the company has continued to mislead doctors and patients during the last decade.
Ms Panara says she and her colleagues were instructed to market the drugs to general practitioners treating common ailments like back pain, rather than only to pain specialists and oncologists more experienced with opioids and their risks. “They had us calling on family doctors, because there are many more family doctors out there than pain management doctors,” she says.
If a doctor expressed concern about a patient showing signs of addiction, Ms Panara was trained to counter those fears by educating them on so-called pseudo-addiction, she says. For example, an addict might turn up at the surgery requesting a fresh batch of pills before their 30-day supply should have run out, claiming they had lost the tablets or accidentally dropped them down the toilet. The advice that she was told to give the doctor was that the patient’s dosing was too low and should be increased, she says.
“The theory of pseudo-addiction was that a patient might exhibit these drug-seeking behaviours, but if their pain were adequately managed by giving a higher dose, then that drug-seeking behaviour would cease,” she says. “Thereby we were building their tolerance, building their physical dependence, and making them an addict.”
Another sales rep says they were discouraged from reporting a suspicious doctor’s surgery to the authorities — a possible “pill mill” that might have been set up with the express purpose of prescribing and profiting from opioid painkillers. The person says they tried to tell their superiors, but were told they could not report the surgery because it was a satellite outpost of a larger practice that was located in another rep’s sales region.
“It was only open two-and-a-half days a week,” says the rep. “It was a small dirty, bare room with plastic chairs, but it was always packed with patients.”
Ms Panara’s managers warned her not to overtly claim that OxyContin was better or safer that other opioids — which is what landed the company in so much trouble in 2007. However, she says she was trained to talk about the product in ways that implied it was safer. For instance, Ms Panara touted the benefits of a 12-hour formulation, which releases the drug into the body over a longer time period than traditional opioids.
“You could say that with a shorter-acting medication that wears off after six hours, there was a greater chance the patient was going to jump their dosing schedule and take an extra one a little earlier,” she says. “We couldn’t say [it was safer], but I remember we were told that doctors are smart people, they’re not stupid, they’ll understand, they can read between the lines.”
In its statement to the FT, Purdue said that “we have strived to do better”. It said it had strengthened its ethics and compliance program, “repeatedly re-trained” its sales force and then in early 2018 ceased all promotion of opioids.
A person close to the company claims it has not received a warning letter from the Food and Drug Administration since 2003 related to OxyContin promotion.
Ms Panara and another sales rep say they were incentivised to grow not just sales of OxyContin, but also generic versions of extended release oxycodone. Whereas pharma salespeople are usually compensated based on their ability to grow a particular medicine, part of the bonus for Purdue’s staff was calculated according to the size of the overall market, according to compensation statements seen by the FT.
The set-up meant that Purdue’s marketing force was indirectly supporting sales of millions of pills marketed by rival companies. Between 2008 and 2010, roughly $1.3bn worth of generic extended release oxycodone was prescribed by doctors, according to figures from Iqvia, a data provider.
It is not clear why Purdue adopted this strategy, and one government official at the US Department of Health and Human Services describes the set-up as unusual: “It’s the equivalent of asking a McDonald’s store manager to grow sales of Burger King and KFC.”
However, Ronny Gal, an analyst at Bernstein, says it is not uncommon for drugmakers to try to grow the size of a market as well as a particular product. “As the leader in the field, Purdue would not have been able to grow the pie unless they could get physicians to prescribe more opiates overall,” he says.
A former senior manager at the company describes the strategy as a “one, two punch”, explaining that as long as doctors were comfortable prescribing an opioid — even if it was not Purdue’s — then sales reps could convert them to OxyContin in time.
One company that would also have benefited from greater demand for opioids is Rhodes Pharma, a drugmaker also owned by the Sackler family. The Connecticut-based company was set up in November 2007, according to registration documents filed in Delaware — just four months after Purdue pled guilty to misleading patients and doctors.
Rhodes has not been publicly connected to the Sackler family before, and their ownership of the company may weaken one of their longstanding defences: that they cannot be held responsible for the opioid crisis because Purdue accounts for a small fraction of overall prescriptions.
In an article on the Purdue website, entitled “Common Myths About OxyContin,” the company says: “The terms oxycodone and OxyContin are often used interchangeably, creating the misperception that all oxycodone abuse involves OxyContin. News reports often mistakenly refer to OxyContin, even when other medications containing oxycodone are specifically named by authorities.”
The article says that OxyContin accounted for just 1.7 per cent of total opioid prescriptions in 2016. However, according to figures seen by the FT, Rhodes is a much larger producer of opioids by volume, and the combined companies accounted for 14.4m prescriptions that year, giving them an overall market share of 6 per cent.
That would make Purdue-Rhodes the seventh largest opioid manufacturer in the US, just behind generic drugmaking giant Teva, and well ahead of many of the other companies targeted in the recent wave of litigation, such as Johnson & Johnson, Endo and Depomed.
According to a US FDA database, Rhodes Pharmaceuticals makes a wide range of opioid products containing highly addictive opiates such as morphine, oxycodone, hydromorphone. Although registered as a separate entity from Purdue, employees say that little distinction is made internally between the two companies. Staff share the same employee handbook, according to a copy of the 2017 manual seen by the FT.
A former senior manager at Purdue says Rhodes was set up as a “landing pad” for the Sackler family in 2007, to prepare for the possibility that they would need to start afresh following the crisis then engulfing OxyContin. It could still serve the same purpose, he says, noting the company’s decision to hire restructuring experts last month. People familiar with Purdue’s finances say they are under pressure as it struggles to contend with mounting legal bills and falling sales of OxyContin.
The former employee is one of hundreds of people that have departed the drugmaker this year, some of whom left because they knew people who had become addicted. “There were a lot of people who had personal experiences — family members, and friends who became addicted — and they started to ask if the benefits of opioids outweigh the risks,” the persons says. “I think that unless you’re a zealot it’s hard to see that they do not.”
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