Florida Joins $160 Million Settlement with Purdue Pharmaceuticals

Settlement resolves civil charges caused by company’s misbranding of OxyContin

September 21, 2007 -- TALLAHASSEE, FL – Florida Attorney General Bill McCollum today announced that his Medicaid Fraud Control Unit has joined a national settlement with the Purdue Frederick Company, Inc., a New York corporation, and Purdue Pharma, L.P. a Delaware Limited Partnership. The companies will pay more than $2 million to the State of Florida to resolve civil claims related to the manufacture, marketing and distribution of OxyContin. OxyContin is an extended-release form of oxycodone, which is a narcotic pain medication.

“It is essential that the integrity of the marketing process of any type of controlled substance is carefully preserved,” said Attorney General McCollum. “When this process is tampered with or intentionally disrupted, patients could be placed in grave danger.”

The settlement resulted from a four-year investigation by the United States Attorney’s Office for the Western District of Virginia in conjunction with other state and federal law enforcement agencies. Under the agreement, the Purdue Frederick Company pleaded guilty to charges of knowingly and fraudulently misbranding OxyContin. Additionally, three company executives pleaded guilty in the same federal criminal proceeding to misdemeanor misbranding violations, which were strictly considered liability offenses. Authorities believe the companies and executives were providing fraudulent information claiming OxyContin had less addictive characteristics than other prescribed pain medications and was less subject to abuse. The government contended the false information was passed from prescription sales representatives to medical professionals and health care providers, potentially inflating sales of the prescription.

Purdue Frederick and Purdue Pharma also entered into civil agreements with the federal government and several states in which the companies agreed that out of the $634.5 million settlement, they would pay $160 million to the federal government and state Medicaid programs. The funds will compensate the Medicaid programs for damages caused by the misbranding of OxyContin from 1995 through 2005.

Under the terms of Florida’s settlement, the State of Florida will recover more than $2 million for the Florida Medicaid program. Of that amount, $1.2 million will be paid directly to the Florida Medicaid program, with the balance going to reimburse the federal government for its share of the Medicaid costs. The civil settlements with Purdue Frederick and Purdue Pharma will further require the companies to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services. The agreement will monitor the companies' operations and ensure future compliance with all laws and regulations.

Source: Florida Attorney General