Oregon AG Announces Settlement With Pharmaceutical Companies Over Misbranding Of Oxycontin

September 28, 2007 -- Oregon Attorney General Hardy Myers today announced that the Department of Justice (DOJ) Medicaid Fraud Control Unit has reached a settlement with the Purdue Frederick Company, Inc., a New York Corporation ("Purdue Frederick") and Purdue Pharma L.P., a Delaware limited partnership ("Purdue") which are associated entities engaged in the manufacture, marketing and distribution of OxyContin, an extended-release form of the painkiller Oxycodone.

As a result of a four-year investigation conducted by the United States Attorney for the Western District of Virginia, in conjunction with other state and federal law enforcement agencies, the Purdue Frederick Company pled guilty to 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. Three executives of the company also pled guilty in the same federal criminal proceeding to federal misdemeanor violations for the same conduct. As a corollary to the federal criminal case, Purdue entered into civil agreements with the federal government and the State Medicaid Fraud Control Units in which Purdue agreed to pay a total monetary judgment of $634.5 million with $160 million allocated to compensate the federal and state health care programs for damages caused by the misbranding of Oxycontin from 1995-2005.

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Under the terms of DOJ's settlement with Purdue, the State of Oregon recovered $1.49 million in restitution and penalties for the Oregon Medicaid Program. The settlement further requires Purdue to enter into a Corporate Integrity Agreement to monitor the company's operations and endure future compliance with all governing laws and regulations.

Oregon's Medicaid Program is administered through the Department of Human Services, Division of Medicaid Assistance Programs as the Oregon Health Plan (OHP). Over 338,000 people receive basic health care coverage each month through OHP based on income eligibility criteria. By law, the Oregon Medicaid Program must reimburse 60 percent of Medicaid settlement recoveries to the federal government.

Source: Oregon Attorney General