Attorney General Conway announces nearly $40M in pharmaceutical settlements, including OxyContin lawsuit

12/23/2015 03:36 PM

FRANKFORT — Ending a case that dates back to late 2007, Attorney General Jack Conway announced Wednesday a $24 million settlement with Purdue Pharma, the drug-maker that created OxyContin.

In a news conference in which he also unveiled a $15.5 million settlement with Johnson & Johnson in a consumer protection case involving the false marketing of the drug Risperdal, Conway said terms of the Purdue Pharma agreement mandate that funds that aren’t paid in legal fees be set aside for addiction services.

Purdue Pharma did not admit wrongdoing but entered the agreement “solely for the purpose of settlement,” according to the settlement.

Conway, however, said the company “informed doctors when they first started marketing this drug that they could prescribe OxyContin, if you could believe it, with a very low risk of addiction” and “encouraged doctors who weren’t experts in pain management to overprescribe the opioid pain reliever.”

“After eight hard-fought years of litigation, Kentucky’s going to receive $24 million,” he said, noting that the amount is more than 50 times greater than initial settlement offers from Purdue Pharma.

House Speaker Greg Stumbo, during his time as attorney general, filed the suit against Purdue Pharma in October 2007, alleging the company misrepresented risks associated with the pain killer. That lawsuit came after guilty pleas by three current and former Purdue Pharma executives in federal court for misbranding the drug, with the parent company levied $600 million in fines and the executives another $34.5 million, according to a report by The New York Times.

In a statement, Purdue Pharma General Counsel Philip C. Strassburger says the settlement allows the company “to focus on bringing innovative abuse-deterrent medicines to patients and our other efforts to combat prescription drug abuse and overuse.”

“For more than a decade we’ve implemented industry-leading programs to reduce the abuse and overuse of prescription opioids, including our 2010 reformulation of OxyContin with abuse-deterrent properties,” Strassburger said.

Stumbo, in an interview with Pure Politics, said his office theorized that damages associated with OxyContin abuse in Kentucky “would have been in the billions of dollars.”

Stumbo, D-Prestonsburg, said he hoped to review the case file at some point, noting that he had not read the settlement agreement before speaking with Pure Politics.

“At first blush it seems to me that $24 million is a lot of money, but not, I don’t think, what we believed when we initially brought that case would be adequate to compensate the victims of all the misery and death that (Purdue Pharma) caused in Kentucky, particularly in eastern Kentucky,” he said.

“But let me add a caveat to that because I haven’t been involved in that case. It could well be that as with any case, roadblocks pop up and I know that the attorney general’s office has a very capable staff over there, very capable attorneys, so I’m not going to criticize their judgement.”

Stumbo said he would have much rather seen the company face a jury rather than settle the case.

“What they did and what they intentionally did to the general population in these impoverished areas, particularly in eastern Kentucky, in my judgement, they should’ve been put in jail for it,” he said.

Conway said attorneys for Kentucky and Purdue Pharma had been in negotiations for months, and he said the state had some concerns that a favorable judgement in Pike Circuit Court would stand on appeal.

“Kentucky law’s very specific on how you have to show damages, so we were in a position, we had a damages model that said OK, you might be liable for prison costs, you’re liable for nuisance and all these other things,” Conway said. “But our law was beginning to show us that we had to be very clear that, OK, Purdue marketed to doctor X, who relied on that, who prescribed to patient Y, and then patient Y became addicted and here are the costs, and we had to show that on an individual basis for each of the cases.”

That prompted attorneys to begin negotiating a settlement, and Conway said he bartered “on a one-on-one basis” with one of Purdue Pharma’s attorneys.

“I just thought after eight years, after the long suffering that’s been caused by OxyContin that if we could go ahead and get $24 million now and get that in for the purposes of treatment, being 50 times more than what we were originally offered, I thought that was better than maybe getting a verdict that we might lose on appeal,” Conway said.

“… If it’s gone on eight years so far and we’re still trying to get a trial date, how much longer would it go on with a trial and then appeals after that? It was time to settle the case.”

In the Risperdal case, Conway said Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, did not disclose side effects associated with the drug and marketed it for uses other than those approved by the U.S. Food and Drug Administration.

Risperdal has been approved to treat schizophrenia and acute mania associated with bipolar disorder, but Conway said the drug had been pitched to treat dementia and attention deficit hyperactivity disorder.

What’s more, Conway said Risperdal had been found to cause hormonal imbalances that could lead to breast tissue development and infertility in boys and girls, but Janssen did not update its warning label in fear that awareness could cost the company up to $150 million per year.

The drug also increased the risk of death for elderly patients, and it had been marketed as an “atypical anti-psychotic” medication with low risks of weight gain or diabetes, he said.

“In fact, studies showed that patients that were on Risperdal had as much weight gain as any competitor and also had a greater risk of diabetes,” he said. “Going forward, we have tough injunctive terms that will govern how Risperdal can be marketed in the Commonwealth of Kentucky, and I’m glad that we’re here to protect our citizens against the side effects of this particular drug.”

Conway added that he hopes the $15.5 million settlement will be dedicated to drug treatment similar to the OxyContin agreement.

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.

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