Another Medical and Wall Street "Success Story"! The story of Subsys and Insys

Hannah Kuchler, Shaunagh Connaire, Nick Verbitsky, Annie Wong, Rebecca Blandon and Tom Jennings in The FT


Deborah Fuller had just heard the sentences that were the closest she would get to justice. 

In March 2016, her daughter Sarah died from an overdose of drugs that included Subsys: a tiny yet potent spray containing fentanyl, an opioid 50 to 100 times stronger than morphine. The day before her death, mother and daughter had chatted about her upcoming wedding. Sarah had already bought a garter. Deborah was planning to sew her veil. 

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The next morning, Sarah’s fiancé found her dead, keeled over on her face. “It was not a vision I would wish on anyone. We had to have her cremated because there was no way they could have made it so that she was recognisable,” Deborah recalls in an interview. 

The former nursing assistant had first become addicted to opioids when she was prescribed them for fibromyalgia and neck and back injuries. After she recovered from the addiction, she visited a new doctor. With an Insys sales representative in the room, she was put back on opioids including Subsys — and within 20 days, her dose of the spray was tripled. Admitted to hospital for hyper-sedation, physicians recommended she stop using the spray — but her doctor continued to prescribe it. 

Now, four years later, executives from Insys, the maker of Subsys, had become the first pharmaceutical bosses to be handed prison time for their role in America’s opioid epidemic. Clutching her speech, the 62-year-old mother from New Jersey stood outside the court in Boston this January and accused John Kapoor, the Insys founder, and his colleagues of a “greed and fraud” that took Sarah away when she was just 32. “They are no different from mobsters,” she said. 

Seven of the Insys executives and employees on trial were found guilty of masterminding and participating in a scheme to bribe doctors to prescribe the drug. Kapoor was sentenced to five and a half years on charges that included racketeering conspiracy. Michael Babich, Insys’ former chief executive, and Alec Burlakoff, former vice-president of sales, co-operated with prosecutors and received two and a half, and 26 months, respectively. 

Fuller calls the sentences “a disgrace”, believing they should have been far longer. But she hopes the sheer fact of people going to prison will deter other drugmakers, which may have previously accepted fines as a cost of doing business. “Normally, they just get a slap on the wrist and have to pay a penalty, which was easily made up by selling more opioids,” she says. “At least now, they’ll have to think, maybe they’ll go to jail for this.” 

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The opioid epidemic has shaped America. There have been 750,000 overdose deaths since the crisis began in 1999, according to the Centers for Disease Control and Prevention, and about two-thirds involved an opioid. Fuller’s family is one of many still suffering from losing a loved one. 

Many people hooked on illegal opioids start on painkillers prescribed by doctors. At first, marketers convinced some physicians that opioids were not as addictive as previously thought. But in some regions, the abuse became brazen. One town in West Virginia had 3,200 residents, but was receiving enough opioids for them to take 6,500 pills each over 10 years. 

In a joint investigation between the FT and the PBS series Frontline, we spoke to several former employees about life inside Insys, including Burlakoff, the former vice-president of sales, who we questioned under prosecutors’ supervision. We also interviewed prosecutors, short sellers and the reporters who exposed the scheme. 

Insys was a flagrant flouter of the rules. Founded in 2002, it started clinical trials for its under-the-tongue fentanyl spray in 2007. Subsys won regulatory approval in 2012, more than a decade into the opioid crisis, when overdose deaths were already rising and after other pharma companies had been fined for mismarketing opioids. 

The company used tactics familiar in the US pharmaceutical industry — but took them across the line into illegality. Many drugmakers pay speakers’ fees to doctors, with the understanding that they will recommend their product to peers at educational events — but Insys made it clear that they expected more prescriptions in return for their money. Sometimes it abandoned the pretence of such events completely. 

Subsys was approved for “breakthrough” bursts of pain in cancer patients already tolerant to opioids, yet the majority of prescriptions were for patients, like Fuller, who did not even have cancer. It is legal and common for doctors in the US to prescribe drugs “off label” or for uses they are not approved for. But it is illegal for pharmaceutical companies to market their medicines for these other uses. 

Jerry Avorn, who heads the division of pharmacoepidemiology at Brigham and Women’s Hospital in Boston, believes it was mostly the marketing to doctors that made Subsys “lethal”. “The Insys example is the extreme . . . ‘mass shooter’ version of what happens when you create a culture that does not pay enough attention to what’s true and what isn’t about drugs, and where you allow uncontrolled marketing,” he says. “What made it so dangerous was people getting behind it and seeing it as a ticket to riches.” 

The pharmaceutical industry has a history of paying settlements in the billions of dollars. But even as evidence of investigations began to emerge, analysts played down the risks, sometimes citing companies that had previously only received fines, and investors bid up the stock. 

Across the US, counties and states are now suing pharmaceutical companies, desperate to recoup the cost of treating and policing those hooked on their drugs. Many of the defendants have teamed up to offer $48bn to settle these suits — but so far, many states are holding out for more. After all, according to the Council of Economic Advisers, the crisis cost the country $2.5tn from 2015 to 2018. 

“Most people involved in making opioids, distributing them and financing the companies turned a blind eye as at first there were thousands of deaths, then tens of thousands, and then hundreds of thousands of deaths. These are the kind of numbers we usually associate with genocides and civil wars — in the richest country in the history of human civilisation,” says Anand Giridharadas, author of Winners Take All, a critique of how elites make their money. “There’s now a mountain of evidence about all the people who had warning signs who ignored them.” 

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At the end of 2013, Insys chief executive Michael Babich was lauded on CNBC. The stock was the best performing initial public offering of the year — up by more than 400 per cent at its peak — and sales had risen almost sevenfold year-on-year. The TV anchor served up a softball: “Tell us what it is about Insys that has investors so excited?” 

Wearing a tightly buttoned gingham shirt, Babich showed off the Subsys spray, smaller than an asthma inhaler. He blinked rapidly as he trotted out the official line: the product is designed for cancer patients suffering from “breakthrough” bursts of pain. 

Wall Street was captivated by the numbers coming out of the small Arizona-based company — and downplayed risks it could not quantify. The Wall Street Journal praised Babich that year as “the right kind of insider trader” for legally buying more stock to show his conviction in Insys. Insys founder, John Kapoor, originally from India, cast himself as an immigrant success story, telling Forbes: “This is the country you can do it in. Nowhere else.” 

David Amsellem, a softly spoken analyst at Piper Sandler with decades of experience covering pharmaceuticals, recommended buying Insys in 2014. Speaking in a conference room above New York’s Park Avenue, he described how he and fellow analysts were impressed that sales were taking off, when most small biotech companies spend years investing in R&D before selling anything. “Insys was a rare breed as a company that had a product that was on the market,” he says. “In other words, it wasn’t just a hope and a dream.”

For Stephanie Yon, however, Insys was a nightmare. That December when Babich was promoting the fentanyl spray on TV, the Michigan mother of three started seeing Dr Gavin Awerbuch, seeking treatment for pain from a car crash the month before. Yon did not have cancer. She had not taken opioids before. Subsys came with a “black-box warning” that it could cause respiratory depression and death. Yet Awerbuch prescribed her a plethora of opioids, including Subsys. Then, he increased her dose rapidly. The 38-year-old died on March 14 2014, just three months after the initial prescription, with lethal levels of fentanyl in her body. 

Brian McKeen, the lawyer for Yon’s family, says no one could have mistaken the drug as safe. “It doesn’t happen because of a lack of scientific knowledge, or a lack of warning. It happens because of doctors disregarding patient safety and putting their own financial interest first,” he says. 

Unbeknown to Yon, her doctor had such a close relationship to Insys that the company’s management would advise sales reps across the US to get their own Awerbuch. He was the top prescriber of Subsys in the country, helping fuel sales that rose 276 per cent year-on-year in the first quarter of 2014. In return, his pockets jangled with so-called “speakers’ fees”: in 18 months, he was paid $138,000, ostensibly for educating other medical professionals about the drug. The local press reported that much was spent on his vast collection of ancient coins. 

At the trial last year, Awerbuch described searching his files for new patients to write Subsys prescriptions for. “It got to the point — and this was a complete lack of judgment on my part, but I started prescribing Subsys to patients who really didn’t need such a potent medicine,” he said. “I probably went against my Hippocratic oath and did prescribe medicine that could potentially harm patients.” 

He liked the money and the Insys reps, who made him feel like they were his friends. Many were hired for their beauty — Burlakoff says he knew that “sex sells” — and few had deep experience in pharmaceuticals. “Honestly, they had beautiful sales reps, and I liked the attention I was getting,” Awerbuch testified. Two months after Yon died, he was arrested. He pled guilty and was sentenced to 32 months in prison and forced to pay restitution and fines of $4.1m. 

“When you have a prescriber who can say, ‘I was bribed,’ that’s an important moment,” says Nat Yeager, who prosecuted the Insys executives. But inside the company, Burlakoff claims, no one cared. In fact, the sales representative who courted Awerbuch was promoted. Asked about the case on an earnings call, Babich insisted: “In no way, shape or form was there any allegations against Insys” [sic]. 

Amsellem, the Piper Sandler analyst, says Insys leaders were “very, very clear” that the doctors who were arrested were just “bad actors”. “Basically, I had to take management’s word for it. And there’s always going to be that element of trust,” he says. “You want to believe that management teams are going to be honest.” 

The stock carried on rising. 

Giridharadas says Wall Street funded the opioid crisis, just like it speculated its way into causing the financial crisis. “The system is set up to tell corporations to make as much money as possible by cutting every possible societal corner,” he says. “It is a sector of our society that is consistently working in advocating against the life, liberty and pursuit of happiness of the American people.” 

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A year later, Insys sales representatives were revelling in their success. Sales in the first quarter of 2015 soared more than 70 per cent year-on-year, and the stock was climbing towards its peak that July, at almost six times the IPO price. At a national sales conference in Arizona, reps showed off a video that was later to become an exhibit at trial. Parodying a hit by hip-hop artist A$AP Rocky, the sales reps rapped: “I love titration. Yeah, that’s not a problem. I got new patients, and I got a lot of ’em.” 

The lines referred to the tactics used by sales reps of pressuring doctors to escalate patient doses of Subsys — known as titration. Higher doses fetched higher prices, and so the reps pocketed fatter commissions. In the video, a man in a giant Subsys costume dances with the rappers. At the end, Burlakoff comes out from under the costume. The audience laughed and clapped, one former sales representative told the FT and PBS Frontline. They had no idea that it would be “a piece of evidence in court in four or five years’ time,” he says. 

Our team interviewed Burlakoff last summer, before he was sentenced, under the supervision of the prosecutors at a studio in Boston. Wearing the smart suit of the salesman he once was, he was extremely talkative. Just as he had decided to “co-operate like nobody’s business” with the prosecutors, he was eager to recount how Insys devised its scheme. “I didn’t think about the patients, the people suffering, the addiction,” he admits. “I imagined that I was selling a widget.” 

He described how he was in awe of the billionaire Kapoor and set about creating a team that would recruit doctors who, nine times out of 10, were not oncologists. “It all comes down to targeting. You gotta find their hot button. Whatever makes them tick. And it sounds ruthless and it is ruthless that we would target someone that is in distress in an effort to take advantage of them,” he says. Sometimes the target was wooed more literally. “Sex with a doctor or chartering a private jet and taking a couple of doctors to, say, Cancún, Mexico. It’s been done,” he says. 

The criminal conspiracy went right to the top. While many pharmaceutical companies pay speakers’ fees to doctors, they don’t officially expect them to prescribe more of their drug. Kapoor insisted on a clear return on investment. “Dr Kapoor doesn’t lose. He made that very clear. He did not want to lose a penny,” Burlakoff recalls. Insys sales representatives were instructed to deliver at least a 2:1 return. “The only way that I knew how to do it, to get that guarantee, is to bribe doctors.” 

This clarity was to prove the company’s downfall. Prosecutors discovered a spreadsheet — which they dubbed a “smoking gun” — that showed calculations of the return Insys was getting from its investment in speakers’ fees. Insys also deceived insurers so they would pay for prescriptions. The company created an internal reimbursement centre, giving staff carefully worded scripts known as “The Spiel” that would convince insurers to pay up, often by implying — or even claiming — that a patient had cancer when they did not. 

Fred Wyshak, one of the prosecutors, said in an interview: “Kapoor decided that, ‘If I’m paying doctors to speak, I’m also paying them to write [prescriptions].’ And philosophically, that’s not supposed to be the way it works. I’m not saying that’s not the reality in the pharmaceutical industry, and as I think Burlakoff described it, that’s the dirty little secret in the pharmaceutical industry, but nobody ever discusses it.” 

Wyshak had built his career prosecuting the mafia. He used similar tactics to turn witnesses and unearth evidence to prosecute Insys leadership. Kapoor was the ultimate target. “The executives at Insys displayed an arrogance that you find in organised crime groups,” he says. “They thought that they were above the law.” 

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Short sellers, who search for stocks they think will fall and profit if they do, were also digging into Insys. They believed that Wall Street was missing warning signs. Jim Carruthers, who runs his firm Sophos Capital from Silicon Valley, became suspicious because there were so few doctors prescribing so much Subsys. Carruthers had shorted healthcare companies before and began to piece together public data including which doctors Insys was paying, available under transparency laws, and the numbers of overdoses related to the drug. He also hired a private investigator, who visited a top prescriber in Alabama, describing it as the “epitome of a pill mill”. 

“We thought this was all information that when it came out into the public market, that would change the investors’ perception of the value of the stock,” Carruthers says. His “aha moment” came when his firm approached someone who used to work for Insys competitor Cephalon. It turned out the employee also used to work for Insys. “When we asked him why he left that name off his résumé he told us, ‘Because these guys are all going to get arrested. They’re all going to go to prison,’” he says. 

Carruthers built his short position and sent tips to journalists. In April 2015, Roddy Boyd, a hedge-fund analyst-turned-investigative reporter in North Carolina, published an exposé, “Insys Therapeutics and the New ‘Killing It’” on his non-profit site, called The Southern Investigative Reporting Foundation at the time. The stock fell almost 10 per cent. Within weeks, though, it had recovered. Carruthers says the “greed” went beyond the top of Insys, down to its investors. “There were people on Wall Street who were intent on keeping this stock price up and, I believe, ignoring some of the more obvious indications that this was an unsustainable, potentially fraudulent business model,” he says. 

Amsellem says the first reports of investigations into Insys were met with a “collective shrug”. “There had been a whole host of investigations of other companies, companies that are industry leaders and big fines that were paid. And none of these companies were put into bankruptcy,” he says. 

When David Steinberg, an analyst at Jefferies, initiated coverage of the stock as a “buy” in late 2014, he acknowledged the investigations could bring “more negative headlines”. “As we are not privy to the facts, we are not in a position to render a conclusion. That said, we’re pretty sure that the worst case outcome for Insys is some sort of fine,” he wrote. The fact that investors assumed investigations could be settled for a fine was understandable. There was no precedent for pharmaceutical executives being sent to jail. Purdue Pharma, owned by certain members of the Sackler family, had settled a 2007 misbranding case of its opioid OxyContin for $600m. Cephalon, which also sold a fast-acting fentanyl product Actiq and had previously employed Burlakoff, settled investigations into its marketing practices in 2008 for $425m. 

“If Cephalon executives had gone to jail for the way they promoted Actiq, for actions they took that promoted a loss of life, then maybe we wouldn’t have had a Subsys,” says Andrew Kolodny, co-director of opioid policy research at the Heller School for Social Policy and Management. 

In late 2015, more heavy prescribers of Subsys were arrested and the company began to suspect federal agents were pursuing executives. And yet, in 2016, five out of the six analysts covering the stock still had “buy” or “outperform” ratings on it. Some analysts kept buy ratings on Insys until shortly before it went bankrupt in 2019, according to Sinan Gokkaya, an associate professor of finance at Ohio University. “Short sellers have an incentive to push down the price so they can get involved in negative investigations,” he says. “If I’m an analyst, I don’t have much to gain from a negative stock price.” 

In May 2017, Amsellem became the second to downgrade Insys, rating it “neutral”. He did not rate it as “underweight” until March 2018, five months after Kapoor had been arrested and charged. Amsellem says he wanted to keep his focus on “data and information”. By 2018, investigations had made doctors more cautious about prescribing any fast-acting fentanyl drug. Subsys sales were lower than they had been at the initial public offering in 2013. 

“I don’t regret not downgrading it earlier,” he explains. “I think that to make decisions on stocks you have to be methodical . . . You don’t want to be knee-jerk. Does that mean that sometimes you might get things wrong? Yes. I get things wrong all the time in terms of stockpicking.” 

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If you google “Subsys”, you will find, perhaps surprisingly, that the tiny fentanyl spray is still on the market in the US. After executives were convicted and Insys was ordered to pay $225m to the US government, the company filed for Chapter 11 bankruptcy in June 2019. Subsys was sold to Wyoming-based BTcP Pharma, in return for paying a proportion of sales to creditors. Several state attorney-generals objected. The Maryland attorney-general argued there were “ample red flags” about the new owner. “Patients became addicted to Subsys through Insys’ misconduct and their addiction has not been treated; the court should ensure, in approving any sale, that Subsys will not fall into the hands of those who would further exploit that addiction through intentional conduct or negligence,” the objection read. “Further harm should not emerge from this bankruptcy.” The sale was approved after BTcP promised to only market it for cancer patients. BTcP’s parent company did not respond to a request for comment. 

Insys was an extraordinary case of explicit bribery to prescribe a potent opioid — and an unusual example of government agencies rallying together to prosecute executives. But it also exposed flaws in how the US regulates drugs. The system makes it hard to catch bad actors — whether individuals or entire companies — before they devastate lives. 

Chris McGreal, author of American Overdose, says it took the FDA 20 years to improve its monitoring of whether a drug is addictive. “One of the strongest and most constant criticisms of the FDA during this epidemic is that it’s taken a very narrow view of the grounds on which it approves a drug,” he explains. “They don’t want to know the answer to the question, is this drug addictive and therefore dangerous? Will it kill patients?” 

Since Subsys came on the market in 2012, the regulator has put new warnings on the boxes of opioids and required companies to do studies into misuse and overdose after approval. It has requested that one opioid — Opana ER, made by Endo Pharmaceuticals — be removed from the market because of patterns of abuse, but also approved Dsuvia, by AcelRx Pharmaceuticals, another fast-acting opioid, despite strong criticism. 

Yet off-label prescription is still rife. Sometimes it makes sense to give doctors discretion, but it can also be dangerous: concerns have been raised about the effects of anti-psychotics prescribed for dementia, which ended up increasing death rates, and antidepressants that raise the risk of suicide in children and adolescents. 

Aaron Kesselheim, a professor at Harvard Medical School, believes the FDA needs to invest more in monitoring drugs after they have approved them. He fears recent court cases have given pharma companies more — not less — latitude in how they market drugs off-label. “Things are moving in the wrong direction,” he says. 

The Physician Payment Sunshine Act of 2010 put data on doctors taking dollars online. But it would take an enterprising patient to discover it — and decipher what it might mean for their care. And transparency has not stopped many doctors from taking the money. A 2019 paper in the journal Addiction analysed data from more than 800,000 physicians and found those who received money from opioid makers tend to prescribe substantially larger quantities of opioids. 

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The US is now consumed by another public health disaster. Yet the coronavirus pandemic could end up exacerbating the opioid epidemic. A report from the Well Being Trust, a foundation focused on mental health, predicted “deaths of despair” from suicide, drug and alcohol abuse, could rise because of Covid-19, leading to another 75,000 deaths. Lawsuits against other opioid makers have been delayed by lockdowns. There are civil suits against much larger companies including Johnson & Johnson and Teva, as well as distributors and pharmacies. Attorney-generals are pursuing certain members of the Sackler family in relation to Purdue Pharma, but those cases are on hold as part of the bankruptcy process. There are also signs of a criminal investigation, with opioid manufacturers being hit with subpoenas. The companies and members of the Sackler family all deny any wrongdoing. 

Wall Street analysts do now say that litigation risks are affecting their ratings. But they still view the potential fines as a financial calculation. As news has trickled out about possible settlements, they have tried to look for bright sides. One wrote that the deal would likely be less than the $248bn the tobacco industry settled for in 1998, because there have been fewer deaths from prescription opioids than there were from smoking. Another called possible fines “manageable” for J&J, which is the world’s largest healthcare company. 

Meanwhile families such as the Fullers live with their loss every day. Deborah says the end of the year is always a slog: Sarah is missing from Thanksgiving, then her birthday, then Christmas. “We haven’t decorated for Christmas in some time,” she says. “Within a very short period of time, there are all these family-oriented holidays, when one fourth of our family is not here any more.” She hopes the Insys case will be a warning to other drugmakers — but she also believes the broader system needs to change. It should be far harder to prescribe medications off-label, especially dangerous opioids, she says. Doctors should be cautious about taking money from pharmaceutical companies, and, if they do, they should be forced to declare it “in a frame in big letters in their office”. 

“They take an oath not to hurt anybody,” she says. “When your patients are dying . . . that goes beyond hurting.”

The making of an opioid epidemic

When high doses of painkillers led to widespread addiction, it was called one of the biggest mistakes in modern medicine. But this was no accident. By Chris McGreal in The Guardian 

Jane Ballantyne was, at one time, a true believer. The British-born doctor, who trained as an anaesthetist on the NHS before her appointment to head the pain department at Harvard and its associated hospital, drank up the promise of opioid painkillers – drugs such as morphine and methadone – in the late 1990s. Ballantyne listened to the evangelists among her colleagues who painted the drugs as magic bullets against the scourge of chronic pain blighting millions of American lives. Doctors such as Russell Portenoy at the Memorial Sloan Kettering Cancer Center in New York saw how effective morphine was in easing the pain of dying cancer patients thanks to the hospice movement that came out of the UK in the 1970s.

Why, the new thinking went, could the same opioids not be made to work for people grappling with the physical and mental toll of debilitating pain from arthritis, wrecked knees and bodies worn out by physically demanding jobs? As Portenoy saw it, opiates were effective painkillers through most of recorded history and it was only outdated fears about addiction that prevented the drugs still playing that role.

Opioids were languishing from the legacy of an earlier epidemic that prompted President Theodore Roosevelt to appoint the US’s first opium commissioner, Dr Hamilton Wright, in 1908. Portenoy wanted to liberate them from this taint. Wright described Americans as “the greatest drug fiends in the world”, and opium and morphine as a “national curse”. After that the medical profession treated opioid pain relief with what Portenoy and his colleagues regarded as unwarranted fear, stigmatising a valuable medicine.

These new evangelists painted a picture of a nation awash in chronic pain that could be relieved if only the medical profession would overcome its prejudices. They constructed a web of claims they said were rooted in science to back their case, including an assertion that the risk of addiction from narcotic painkillers was “less than 1%” and that dosages could be increased without limit until the pain was overcome. But the evidence was, at best, thin and in time would not stand up to detailed scrutiny. One theory, promoted by Dr David Haddox, was that patients genuinely experiencing pain could not become addicted to opioids because the pain neutralised the euphoria caused by the narcotic. He said that what looked to prescribing doctors like a patient hooked on the drug was “pseudo-addiction”.
Portenoy toured the country, describing opioids as a gift from nature and promoting access to narcotics as a moral argument. Being pain-free was a human right, he said. In 1993, he told the New York Times of a “growing literature showing that these drugs can be used for a long time, with few side-effects, and that addiction and abuse are not a problem”.

Long after the epidemic took hold, and the death toll rose into the hundreds of thousands in the US, Portenoy admitted that there was little basis for this claim and that he had been more interested in changing attitudes to opioids among doctors than in scientific rigour.

“In essence, this was education to destigmatise and because the primary goal was to destigmatise, we often left evidence behind,” he admitted years later as the scale of the epidemic unfolded.

Likewise, Haddox’s theory of pseudo-addiction was based on the study of a single cancer patient. At the time, though, the new thinking was a liberation for primary care doctors frustrated at the limited help they could offer patients begging to get a few hours’ sleep. Ballantyne was as enthusiastic as anyone and began teaching the gospel of pain relief at Harvard, and embracing opioids to treat her patients.

“Our message was a message of hope,” she said. “We were teaching that we shouldn’t withhold opiates from people suffering from chronic pain and that the risks of addiction were pretty low because that was the teaching we’d received.”

But then Ballantyne began to see signs in her patients that experience wasn’t matching theory. Doctors were told they could repeatedly ratchet up the dosage of narcotics and switch to a new and powerful drug, OxyContin, without endangering the patient, because the pain, in effect, cancelled out the risk of addiction. To her dismay, Ballantyne saw that many of her patients were not better off when taking the drugs and were showing signs of dependence.

Among those patients on high doses over months and years, Ballantyne heard from one after another that the more drugs they took, the worse their pain became. But if they tried to stop or cut back on the pills, their pain also worsened. They were trapped.

“You had never seen people in such agony as these people on high doses of opiates,” she told me. “And we thought it’s not just because of the underlying pain; it’s to do with the medication.”

As Ballantyne listened to relatives of her patients talk about how much the drugs had changed their loved ones, her misgivings grew. Husbands spoke of wives as if a part of them were lost. Mothers complained that children had become sullen and distant, their judgment gone, their personality warped, their character altered. None of this should have been happening. Pain relief was supposed to free the patients, not imprison them. It was all very far from the promise of a magic bullet.

As the evidence that opioids were not delivering as promised piled up, the Harvard specialist began to record her findings. By then, though, there were other powerful forces with a big financial stake in the wider prescribing of painkilling drugs. Pharmaceutical companies are not slow to spot an opportunity and the push for wider prescribing of opioids had not gone unnoticed by the drug-makers, including the manufacturer of OxyContin, Purdue Pharma, which rapidly came to play a central role in the epidemic.

As the influence of the opioid evangelists grew, and restraints on prescribing loosened, the pharmaceutical industry moved to the fore with a push to make opioids the default treatment for pain, and to take advantage of the huge profits to be made from mass prescribing of a drug that was cheap to produce.

 

Bottles of painkiller OxyContin, made by Purdue Pharma. Photograph: Reuters

The American Pain Society, a body partially funded by pharmaceutical companies, was pushing the concept of pain as the “fifth vital sign”, alongside other measures of health such as heart rate and blood pressure. “Vital signs are taken seriously,” said its president, James Campbell, in a 1996 speech to the society. “If pain were assessed with the same zeal as other vital signs are, it would have a much better chance of being treated properly. We need to train doctors and nurses to treat pain as a vital sign.”

The APS wanted the practice of checking pain as a vital sign as a matter of routine adopted in American hospitals. The key was to win over the Joint Commission for Accreditation of Healthcare Organizations, which certifies about 20,000 hospitals and clinics in the US. Its stamp of approval is the gateway for medical facilities to tap into the huge pot of federal money paying for healthcare for older, disabled and poor people. Hospitals are careful not to get on the wrong side of the joint commission’s “best practices” or to fail its regular performance reviews.

In response to what it called “the national outcry about the widespread problem of under-treatment” – an outcry in good part generated by drug manufacturers – the commission issued new standards for pain care in 2001. Hospital administrators picked over the document to ensure they understood exactly what was required.

Every patient was to be asked about their pain levels, no matter what the reason they were seeing a doctor. Hospitals adopted a system of colour-coded smiley faces, to represent a rising scale of pain from 0-10. The commission ruled that anybody identifying as a five – a yellow neutral face described as “very distressing” – or above was to be was to be referred for a pain consultation.

The commission told hospitals they would be expected to meet the new standards for pain management at their next accreditation survey. Purdue Pharma was ready. The company offered to distribute materials to educate doctors in pain management for free. This amounted to exclusive rights to indoctrinate medical staff. A training video asserted that there is “no evidence that addiction is a significant issue when persons are given opioids for pain control”, and claimed that some clinicians had “inaccurate and exaggerated concerns about addiction, tolerance and risk of death”. Neither claim was true.

Some doctors questioned the value of patient self-assessment, but the commission’s regulations soon came to be viewed as a rigid standard. In time, pain as the fifth vital sign worked its way into hospital culture. New generations of nurses, steeped in the opioid orthodoxy, sometimes came to see pain as more important than other health indicators.

Dr Roger Chou, a pain specialist at Oregon Health and Science University who has made long-term studies of the effectiveness of opioid painkillers and helped shape the Centers for Disease Control and Prevention’s policy on the epidemic, said the focus on pain caused patients to give it greater weight than made sense.

“When you start asking people: ‘How much pain are you having?’ every time they come into the hospital, then people start thinking: ‘Well, maybe I shouldn’t be having this little ache I’ve been having. Maybe there’s something wrong.’ You’re medicalising what’s a normal part of life,” he said.

One consequence was that people with relatively minor pain were increasingly directed toward medicinal treatment while consideration of safer or more effective alternatives, such as physiotherapy, were marginalised. Another, said Chou, was the increased expectation that pain can be eliminated. Chasing the lowest score on the pain chart often came at the expense of quality of life as opioid doses increased. “It’s better to have a little bit of pain and be functional than to have no pain and be completely unfunctional,” said Chou.

Health insurance companies piled yet more pressure on doctors to follow the path of least resistance. This meant cutting consultation times and payments for more costly forms of pain treatment in favour of the direct approach: drugs.

The joint commission needed a way to judge whether its 2001 edict on pain was being adhered to and latched on to patient satisfaction surveys. It took a determined doctor to resist the pressure to prescribe. Physicians could spend half an hour pressing a person to take more responsibility for their own health – eat better, exercise more, drink less, find ways to deal with stress – only to watch an unhappy patient make their views known on the satisfaction survey and face a dressing down from hospital management. Or they could quickly do what the patient came in for: give them a pill and get full marks.

In Detroit, Dr Charles Lucas’s three decades of experience as a surgeon told him it was possible to what was easy and sign the prescription, or to do what was hard. Lucas grew up in the city and had been instrumental in establishing Detroit’s publicly owned hospital as the highest-level trauma centre in Michigan and one of the first top-tier centres in the country.

 

Activists in New York, during a protest denouncing the city’s ‘inadequate and wrongheaded response’ to the opioid overdose crisis. Photograph: Getty
Emergency departments became beacons for the opioid dependent, who quickly learned to game the system to get drugs on top of their prescriptions. They turned up feigning pain, knowing harassed medical staff under pressure of time and the commission’s standards were likely to prescribe narcotics and move on without too many questions.

“Some of the old-time nurses, they have that jaundiced look in their eye and say ‘So-and-so’s complaining of pain’. You can tell by the look in their eye that they don’t think it’s justified that they get any more medicine,” said Lucas. “The younger nurses, they say we have to treat this pain – because they’ve been indoctrinated – they’ve got to get rid of the pain. God forbid you don’t get rid of the pain. That would be like a mortal sin.”

But there was a price for resisting the pressure to prescribe ever higher doses of pain relief.

Lucas was knocked back in surprise, and then infuriated, to be summoned to appear before his hospital’s ethics committee after a nurse reported him for failing to provide adequate pain treatment.

The surgeon’s longstanding patients included Gail Purton, the wife of a well-known Michigan radio personality. Lucas operated on Purton a few times, and she was back for surgery after her ovarian cancer spread. “It was a big operation. Cut off all sorts of cancer.” The next day, a nurse asked Purton if she was in pain. Purton said she was. The nurse reported Lucas for failing to properly address a patient’s pain. “I got reported because I wasn’t giving her enough pain medicine. She had a big cut from here to here,” Lucas said, running his finger across the front of his shirt and scoffing at the idea that she could be pain-free after an operation like that.

The surgeon responded with a five-page letter to the ethics committee chairman, whom he happened to have trained, challenging the questioning of his professional judgment. Purton wrote her own letter, praising Lucas’s care and saying that she never expected not to have pain after a major operation.

The case was dropped, but it was not an isolated incident. Lucas has worked closely with another surgeon, Anna Ledgerwood, since 1972. She too was hauled before the ethics committee on more than one occasion, on the same charge. It cleared Ledgerwood, but Lucas said more junior surgeons buckled to the pressure to administer opioids just to stay out of trouble.

Lucas regarded the new pain orthodoxy as a growing tyranny. He also thought it was killing patients. He began to collect his own data.

As the joint commission was pushing out its new standards for pain treatment in the early 2000s, the industry was driving a parallel effort to influence the prescribing habits of doctors in small clinics and private practices across the country. Many were still hesitant to prescribe narcotics, in part because of fear of legal liability for overdose or addiction.

The American Pain Society and Haddox, who was by then working for Purdue Pharma, were instrumental in writing a policy document reassuring doctors they would not face disciplinary action for prescribing narcotics, even in large quantities. The industry latched on to the Federation of State Medical Boards because of its influence over health policy individual US states which regulate how doctors practise medicine.

In 2001, Purdue Pharma funded the distribution of new pain treatment guidelines drawn up by the FSMB that sounded many of the same themes as the standards written by the joint commission.

The document picked up on Haddox’s pseudo-addiction theory. “Physicians should recognise that tolerance and physical dependence are normal consequences of sustained use of opioid analgesics and are not synonymous with addiction,” it said.

The FSMB pressed state medical boards to adopt the guidelines and to reassure doctors that adhering to them would diminish the likelihood of disciplinary action.

Over the following decade, the FSMB took close to $2m (£1.52m) from the drug industry, which mostly went to promote the guidelines and to finance a book, Responsible Opioid Prescribing, written with the oversight and advice of a clutch of doctors who were strong advocates of wider use of prescription narcotics. The book was sold to state medical boards and health departments for distribution to physicians, clinics and hospitals. The drug industry paid for the publication but the FSMB kept the $270,000 profits from sales.

Within a few years, the model guidelines were adopted in full or in part by 35 states, and the floodgates were open to mass prescribing of what Drug Enforcement Administration agents came to call “heroin in a pill”. Opioids were soon the default treatment even for relatively minor pain. Dentists gave them to teenagers after pulling their wisdom teeth. Not just one or two days’ worth of pills, but a fortnight or a month’s worth, which, if they did not draw the intended recipient in, frequently sat in the medicine cabinet waiting to be discovered by someone else in the family. The lack of caution in prescribing left an impression among the users that the drugs were harmless, and some people shared them with others as easily as they might an aspirin. Prescribing escalated year on year. So did profits. OxyContin sales passed $1bn a year in 2000. Three years later they were twice that. Other opioid makers were pulling in huge profits too.

By the time the FSMB guidelines were landing in doctors’ inboxes in the early 2000s, Ballantyne had reached her own conclusions about the impact of escalating opioid prescribing. In 2003, she co-authored an article in the New England Journal of Medicine highlighting the dearth of comprehensive trials and saying that two important questions remained unanswered even as mass prescribing of opioids took off. Do they work long term? Are higher doses safe to take year after year? The drug industry and opioid evangelists said yes, but where was the evidence for it?

Ballantyne wrote that there was evidence that putting some patients on serial prescriptions of strong opioids has the opposite of the intended effect. High doses not only build up a tolerance to the drug, but cause increased sensitivity to pain. The drugs were defeating themselves.

Her assessment seemed to warn that if there was an epidemic of pain, it was partly driven by the cure. On top of that, there was evidence that the drugs were toxic. Then came the conclusion that stuck a dagger into the heart of the campaign for wider opioid prescribing. “Whereas it was previously thought that unlimited dose escalation was at least safe, evidence now suggests that prolonged, high-dose opioid therapy may be neither safe nor effective,” she wrote.

Ballantyne was also increasingly aware that the claim that pain neutralised the risk of addiction was false. Quantifying addiction, and who may be vulnerable, is notoriously difficult. Ballantyne, like a lot of doctors, estimated that between 10 and 15% of the population is vulnerable, but that it depends on the substance and circumstances. What she was certain of was that Purdue’s high-strength pill, OxyContin, had been a game changer. “The long-acting opiates suddenly put much higher doses into people’s hands and much more of it, and taking it around the clock made them dependent on it.”

From her research, Ballantyne concluded that OxyContin supercharged what was already widespread dependence on weaker opioid pills by drawing a new group of people into the category at risk of addiction and death. The danger was compounded by OxyContin’s failure to live up to its promise of holding pain at bay for 12 hours. For some patients, it wore off after eight, causing them to take three pills a day instead of two, greatly increasing their overall dose of narcotic and with it the risk of addiction.

Ballantyne thought the article would at least cause her profession and the drug industry to take stock of the impact of mass prescribing. By the time the article appeared, the documented death toll from prescription opioids was running at around 8,000 a year.

“When the 2003 New England journal article came out, I thought it was going to make the medical community sit up and say: ‘Wow. These drugs that we’ve been thinking are helping people are not. We have a real problem.’ But the medical community didn’t at all say: ‘Wow,’” Ballantyne said with half a laugh, 15 years later.

“People in my field who had been, like me, taught we have to do this – people who’d been lobbying to try and increase opiate use, like the palliative care physicians – said: ‘What are you doing? We worked so hard to get to this point, and now you’re going to turn it all around. They become so rattled when you suggest you shouldn’t give the opiates – it’s partly people in the pain field and especially people in pharma – because it’s big business.”

Lucas and Ledgerwood had their own study on the impact of opioids in the works. They came to believe the tyranny of the colour-coded smiley faces was costing lives. Years of surgery have given Lucas a healthy respect for pain as a tool for recovery. To suppress it was dangerous. But as large doses of opioids became the norm, the surgeon noted an increasing number of incidents of patients struggling to breathe after routine operations and being moved to intensive care.

Lucas and Ledgerwood visited trauma centres to collect data on deaths before and after the joint commission standards on pain treatment. In 2007, the two doctors published their findings. Before the commission’s dictum, 0.7% of trauma centre patients died from “excess administration of pain medicines”. The death toll rose to 3.6% after the commission’s policies kicked in.

“In each case, administration of sedation led to a change in vital signs or a deterioration in the respiratory status requiring some type of intervention which, in turn, led to a cascade of events resulting in death,” the paper said. Those were only the deaths in which there was little doubt opioids were responsible, and the real toll was almost certainly higher. “Overmedication with sedatives/narcotics … clearly contributed to deaths,” the study concluded.

A memorial in Washington DC, consisting of 22,000 engraved white pills representing the face of someone lost to a prescription opioid overdose in 2015. Photograph: Mark Wilson/Getty

“I’m convinced that because of the pressures brought to bear by the joint commission, we are killing people,” Lucas told me. The study said the medical staff lived in fear of the joint commission standards which created “great psychological pressure on caregivers” to use narcotics.

In a damning critique, the paper said that the commission’s reliance on pain scales to guide treatment had created an “excessive emphasis on undermedication at the same time ignoring overmedication”. The obsession with ensuring people were not in pain came at the expense of ignoring the dangers of giving large amounts of opioids to people recovering from surgery or serious injury. The drugs may kill the pain but they also risked killing the patient.

The two doctors made no secret of who they blamed for “this preventable cause of death and disability”. “It’s about money. Money has influence, and it influenced the joint commission,” said Lucas.

The surgeon presented the paper to a meeting of the Central Surgical Association and saw it published by the Journal of the American College of Surgeons under the headline “Kindness Kills: The Negative Impact of Pain as the Fifth Vital Sign.”

Afterwards, Lucas got a stream of letters and emails from doctors who recognised the problem. But, unlike Ballantyne, he wasn’t surprised when the policy remained the same. “Did I expect a change? No. It is too ingrained into the medical profession. It’s become financial just like the drug industry is financial. It’s nothing to do with right or wrong. It’s about how the money flows,” he said. “When you write a paper you want there to be unemotional data out there. You want that unemotional data to be analysed and interpreted in one way or the other, but you don’t expect the Renaissance.”

In 2012, nine years after Ballantyne’s cautioning against the mass prescribing of opioids as a quick fix for pain was published in the New England Journal of Medicine, a renowned British pain specialist, Cathy Stannard, called the doctor’s paper “a distant warning bell”, challenging the opening of the floodgates to strong opioids.

Ballantyne continued to collect data and publish ever more detailed insights into the impact of painkillers. A less rapacious drug industry might have paused in its headlong charge to sell opioids, and less blinkered and compliant regulators might have determined that this was the moment to weigh the claims made in favour of permitting such widespread prescribing.

Instead the pharmaceutical companies took the warnings as a challenge to their business interests. Through the 2000s, industry poured money into a political strategy to keep the drugs flowing. It funded front groups and studies to claim that there was indeed an epidemic – but it was of untreated pain. The millions coping with chronic pain were the real victims, the industry said, not the “abusers” hooked on opioids they often bought on the black market or obtained from crooked doctors. That one frequently became the other was conveniently overlooked.

Pharma’s lobbyists worked to persuade Congress and the regulators that to curb opioid prescribing would be to punish the real victims because of the sins of the “abusers”, and it worked. As a result, the devastation ran unchecked for another decade and more. By 2010, doctors in the US were writing more than 200m opioid prescriptions a year. As the prescribing rose, so did the death toll. Last year, more than 72,000 Americans died of drug overdoses, the vast majority from opioids, nearly 10 times the number at the time Ballantyne published her warning.

The head of the FDA at the time OxyContin was approved for distribution two decades ago, Dr David Kessler, later described the opioid crisis as an “epidemic we failed to foresee”. “It has proved to be one of the biggest mistakes in modern medicine,” he said.

Kessler was wrong. It wasn’t a mistake. It was a betrayal.

How Purdue’s ‘one-two’ punch grew the market for opioids

 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.”

Don't blame addicts for America's opioid crisis. Here are the real culprits

America’s opioid crisis was caused by rapacious pharma companies, politicians who colluded with them and regulators who approved one opioid pill after another

Chris McGreal in The Guardian



‘Opioids killed more than 33,000 Americans in 2015 and the toll was almost certainly higher last year.’

Of all the people Donald Trump could blame for the opioid epidemic, he chose the victims. After his own commission on the opioid crisis issued an interim report this week, Trump said young people should be told drugs are “No good, really bad for you in every way.”

The president’s exhortation to follow Nancy Reagan’s miserably inadequate advice and Just Say No to drugs is far from useful. The then first lady made not a jot of difference to the crack epidemic in the 1980s. But Trump’s characterisation of the source of the opioid crisis was more disturbing. “The best way to prevent drug addiction and overdose is to prevent people from abusing drugs in the first place,” he said.

That is straight out of the opioid manufacturers’ playbook. Facing a raft of lawsuits and a threat to their profits, pharmaceutical companies are pushing the line that the epidemic stems not from the wholesale prescribing of powerful painkillers - essentially heroin in pill form - but their misuse by some of those who then become addicted.


The amount of opioids prescribed in the US was enough for every American to be medicated 24/7 for three weeks”

In court filings, drug companies are smearing the estimated two million people hooked on their products as criminals to blame for their own addiction. Some of those in its grip break the law by buying drugs on the black market or switch to heroin. But too often that addiction began by following the advice of a doctor who, in turn, was following the drug manufacturers instructions.

Trump made no mention of this or reining in the mass prescribing underpinning the epidemic. Instead he played to the abuse narrative when he painted the crisis as a law and order issue, and criticised Barack Obama for scaling back drug prosecutions and lowering sentences.

But as the president’s own commission noted, this is not an epidemic caused by those caught in its grasp. “We have an enormous problem that is often not beginning on street corners; it is starting in doctor’s offices and hospitals in every state in our nation,” it said.

 ‘This is an almost uniquely American crisis.’

Opioids killed more than 33,000 Americans in 2015 and the toll was almost certainly higher last year. About half of deaths involved prescription painkillers. Most of those who overdose on heroin or a synthetic opiate, such as fentanyl, first become hooked on legal pills. 

This is an almost uniquely American crisis driven in good part by particular American issues from the influence of drug companies over medical policy to a “pill for every ill” culture. Trump’s commission, which called the opioid epidemic “unparalleled”, said the grim reality is that “the amount of opioids prescribed in the US was enough for every American to be medicated around the clock for three weeks”.

The US consumes more than 80% of the global opioid pill production even though it has less than 5% of the world’s population. Over the past 20 years, one federal institution after another lined up behind the drug manufacturers’ false claims of an epidemic of untreated pain in the US. They seem not to have asked why no other country was apparently suffering from such an epidemic or plying opioids to its patients at every opportunity.

With the pharmaceutical lobby’s money keeping Congress on its side, regulations were rewritten to permit physicians to prescribe as many pills as they wanted without censure. Indeed, doctors sometimes found themselves hauled before ethics boards for not supplying enough.


It’s an epidemic because we have a business model for it. Follow the money


Unlike most other countries, the US health system is run as an industry not a service. That gives considerable power to drug manufacturers, medical providers and health insurance companies to influence policy and practices.

Too often, their bottom line is profits not health. Opioid pills are far cheaper and easier than providing other forms of treatment for pain, like physical therapy or psychiatry. As Senator Joe Manchin of West Virginia told the Guardian last year: “It’s an epidemic because we have a business model for it. Follow the money. Look at the amount of pills they shipped in to certain parts of our state. It was a business model.”

But the system also gives a lot of power to patients. People coughing up large amounts of money in insurance premiums and co-pays expect results. They are, after all, more customer than patient. Doctors complain of patients who arrive expecting a pill to resolve medical conditions without taking responsibility for their own health by eating better or exercising more.

In particular, the idea has taken hold, pushed by the pharmaceutical industry, that there is a right to be pain free. Other countries pursue strategies to reduce and manage pain, not raise expectations that it can simply be made to disappear. In all of this, regulators became facilitators. The Food and Drug Administration approved one opioid pill after another.


The Food and Drug Administration approved one opioid pill after another.


As late as 2013, by which time the scale of the epidemic was clear, the FDA permitted a powerful opiate, Zohydro, onto the market over the near unanimous objection of its own review committee. It was clear from the hearing that doctors understood the dangers, but the agency appeared to have put commercial considerations first.

US states long ago woke up to the crisis as morgues filled, social services struggled to cope with children orphaned or taken into care, and the epidemic took an economic toll. Police chiefs and local politicians said it was a social crisis not a law and order problem.

Some state legislatures began to curb mass prescribing. All the while they looked to Washington for leadership. They did not get much from Obama or Congress, although legislation approving $1bn on addiction treatment did pass last year. Instead, it was up to pockets of sanity to push back.

Last year, the then director of the Centers for Disease Control, Tom Frieden, made his mark with guidelines urging doctors not to prescribe opioids as a first step for chronic or routine pain, although even that got political pushback in Congress where the power of the pharmaceutical lobby is not greatly diminished.

There are also signs of a shift in the FDA after it pressured a manufacturer into withdrawing an opioid drug, Opana, that should never have been on sale in the first place. It was initially withdrawn in the 1970s, but the FDA permitted it back on to the market in 2006 after the rules for testing drugs were changed. At the time, many accused the pharmaceutical companies of paying to have them rewritten.

Trump’s opioid commission offered hope that the epidemic would finally get the attention it needs. It made a series of sensible if limited recommendations: more mental health treatment people with a substance abuse disorder and more effective forms of rehab.

Trump finally got around to saying that the epidemic is a national emergency on Thursday after he was criticised for ignoring his own commission’s recommendation to do so. But he reinforced the idea that the victims are to blame with an offhand reference to LSD.

Real leadership is still absent – and that won’t displease the pharmaceutical companies at all.