OxyContin Maker to Pay Washington $2.7 Million for Medicaid Claims

September 18, 2007 -- OLYMPIA – Washington Attorney General Rob McKenna announced today that the state's Medicaid program will be reimbursed nearly $2.7 million as part of a settlement with drug manufacturers Purdue Pharma and Purdue Frederick Company. The settlement stems from allegations the company improperly marketed the pain medication OxyContin to health providers.

The money is part of $160 million Purdue agreed to pay to the federal government and 26 state programs to resolve liability for false claims made to Medicaid and other healthcare programs. Washington will recover nearly $5.1 million, of which, almost $2.7 million will be paid directly to the state and the balance will be paid to the federal government to reimburse its share of the Washington Medicaid program costs.

“OxyContin is a potent drug with incredibly addictive qualities,” McKenna said. “When a drug is misbranded and consumers and doctors are misled, the outcome can be deadly. Washington’s Medicaid program will be reimbursed for claims made to patients prescribed OxyContin as a result of Purdue’s deceptive marketing.”

McKenna thanked Assistant Attorney General Dawn Cortez and investigator Terry Tate with the Medicaid Fraud Control Unit for their part in reaching the settlement.

This is the second settlement reached between the states and Purdue Pharma in recent months.

On May 8, Washington, 25 other states and the District of Columbia announced a $19.5 million agreement with Purdue Pharma that resolves allegations the company violated consumer protection laws when it aggressively marketed its painkiller OxyContin to doctors while downplaying the risk of addiction. Washington was allocated $719,500 of that amount. Purdue agreed to establish a training program for its sales employees and to market OxyContin for federally approved uses.

Two days later, the Purdue Frederick Company and its top three executives pled guilty to federal criminal charges of knowingly and fraudulently misbranding OxyContin as being less addictive, less subject to abuse and diversion and less likely to cause tolerance and withdrawal problems than other pain medications. Purdue and its executives also agreed to pay a total of $634 million, including the $160 million for Medicaid reimbursement.
The Purdue Frederick Company and Purdue Pharma are part of a worldwide group of related and associated entities engaged in the pharmaceutical business.

A study by the University of Washington’s Alcohol and Drug Abuse Institute found that oxycodone was identified in 13 deaths, all which also involved other drugs, from January to June of 2002 in King County. In a 2002 report, the U.S. Drug Enforcement Administration traced 142 deaths to OxyContin overdose and said the drug contributed to another 318 fatalities nationwide. The DEA said the number of deaths related to the substance rose 400 percent from 1996 to 2001.

Source: Washington Attorney General