Billion-dollar OxyContin verdict rests on disputed missed deadline

What does it cost to miss a deadline? For the company that makes the prescription painkiller OxyContin, the answer could be more than $1 billion.

Kentucky is suing Purdue Pharma on claims that the company misrepresented its prescription painkiller, resulting in a wave of addiction and increased medical costs across the state. But before the trial can start, both sides must file "admissions" so the court could determine a set of facts that are not in dispute.

Kentucky officials filed theirs, which included claims that Purdue Pharma lied about the addictiveness of the drug to doctors, who then overprescribed it to an unwitting population of poor people in Eastern Kentucky.

When Purdue Pharma did not respond, Pike Circuit Judge Steven Combs ruled those claims were admissible in court. That cleared the way for the state to potentially win the lawsuit, with the only question being how much Purdue Pharma would have to pay.

"I always thought if we ever got it to a court of law a billion dollars wouldn't touch it," said Kentucky House Speaker Greg Stumbo, whose office filed the lawsuit when he was state attorney general.

Combs' decision surprised company officials. When the state filed its claims in 2007, Purdue Pharma had 45 days to respond. But in the middle of that window, Purdue Pharma moved the case to federal court, which put the state-court action on hold.

More than five years later, the federal court sent the case back to state court at the request of the Kentucky attorney general's office.

Attorney General Jack Conway's office argues that meant the clock re-started on the original deadline for Purdue Pharma to respond to the state's request that it admit or deny damaging conduct.

However, Purdue Pharma contends that the original deadlines died when the case was transferred to federal court and that the state should have had to serve new requests for admissions on the company. On Thursday, the two sides made oral arguments to the state Supreme Court on the issue.

Purdue Pharma wants the high court to issue an order that would in effect strike down the admissions of liability Combs accepted.

Purdue Pharma said a co-defendant in the case, Abbott Labs, also missed the deadline yet the court allowed that company to file a response anyway. And they said if the case moves forward like this, the company won't be able to adequately defend itself and won't be able to get information from Kentucky officials about the state's role in the epidemic of prescription painkiller abuse.

"The commonwealth is going to be able to use (these admissions) as a sword and as a shield to keep us from finding the information that we need to develop a full record," attorney Daniel Danford said.

Danford argued that Combs' ruling was incorrect and that letting it stand would cause irreparable damage to the company.

On the other hand, striking down Combs' order would just put the case back on its original path and not hurt the state, Danford said.

Conway's office contends the state lawsuit was suspended when it was transferred to federal court, then re-started when it came back. That's the way courts have handled cases like this going back 50 years, and making an exception for Purdue Pharma will result in a flood of similar requests from other litigants who miss deadlines, the state contends.

"Purdue Pharma could care less about the merits of this case," Assistant Attorney General Mitchel Denham said. "They are a multi-billion-dollar company here asking this court for special accommodations and to change the rules because they did not follow the clear and simple rules."

Conway's office also argues that the company would have adequate appeal remedies if the high court upholds the decision to let the admissions of liability be used against the company.

And ​the state argues it already has been harmed by how much time Purdue Pharma kept the case alive in federal court​.​ One key witness died, for instance.

The company and three officers pleaded guilty in federal court in Virginia in 2007 to making misleading claims about the addiction potential of OxyContin. A judge ordered a fine of more than $630 million.

Kentucky had joined other states in an action against Purdue Pharma, but the company offered ​the ​state only a little more than $500,000 to settle.

The state rejected the settlement and joined Pike County in a lawsuit against the company.

Conway said the county settled its complaint for about $4 million. The state has a stronger case, however, he said.

Conway said Thursday that the company is trying to escape the consequences of fueling a deadly epidemic of drug abuse.

"We're just holding their feet to the fire," he said.

OxyContin is the brand name for oxycodone, an opioid that the FDA approved for alleviating chronic pain in 1995. It was designed as a pill to release a steady flow of painkiller over 12 hours.

Drug abusers quickly learned to crush the pill, however, releasing a rush of the drug all at once.

The company won approval of a tamper-resistant version of the pill in 2010 and said it has taken extraordinary measures to combat drug abuse.