The maker of OxyContin will pay $24 million to settle a claim that it misrepresented how easy it is to get hooked on the powerful painkiller, driving up drug problems and deaths in Kentucky, Attorney General Jack Conway announced Wednesday.
The money will go into the state treasury to be used for addiction prevention and treatment programs, Conway said.
The deal requires Purdue Pharma to make an initial payment of $12 million and eight annual payments of $1.5 million each.
“Purdue Pharma created havoc in Kentucky, and I am glad it will be held accountable,” Conway said in a news release. “Purdue lit a fire of addiction with OxyContin that spread across this state, and Kentucky is still reeling from its effects.”
The company had denied wrongdoing and did not admit liability as part of the settlement.
The settlement resolved a lawsuit the state filed eight years ago. There was a lengthy delay after the company moved the lawsuit to federal court. A judge ultimately sent the case back to Pike Circuit Court, where the county and state had sued Purdue Pharma.
Pike County reportedly settled its claim against the company in 2013 for $4 million.
Purdue Pharma said in a statement that the state’s lawsuit covered alleged improper marketing activities by the company from 1996 to 2001, and involved the original version of OxyContin.
OxyContin, a type of painkiller called an opioid, is designed to be released over 12 hours to provide continuing pain relief.
However, the first version of the pill could be crushed easily and then snorted to produce a quick, powerful high akin to that of heroin.
The company later developed a version of the drug that has features to deter crushing and abuse.
The settlement allows Purdue Pharma “to focus on bringing innovative abuse-deterrent medicines to patients and our other efforts to combat prescription drug abuse and overuse,” company attorney Philip C. Strassburger said in a statement.
“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.
Abuse of OxyContin snowballed in Eastern Kentucky beginning in the late 1990s, driving up overdose deaths.
Kentucky overdose deaths totaled 1,087 in 2014, a dramatic increase from 15 years ago. That included deaths in Kentucky and deaths of Kentucky residents elsewhere, according to the state Office of Drug Control Policy.
There’s been a troubling increase in heroin abuse in recent years, but prescription opioids still play a significant role in overdoses.
In 2007, Purdue Pharma and three company executives pleaded guilty in federal court in Virginia to making misleading claims about the potential for people to become addicted to OxyContin.
A judge ordered the company to pay more than $630 million in that case.
The same year, 49 states settled their own claims against the company. Kentucky was the lone holdout.
That was because the company offered the state only $500,000, Conway said.
Kentucky sued Purdue Pharma, claiming it mounted an aggressive, deceptive marketing campaign after OxyContin was approved in 1995, falsely telling doctors the drug was difficult to abuse and less addictive than some other painkillers.
The state sued to recover health care spending related to drug abuse, among other things.
While the $24 million to the state is significantly more than what Purdue Pharma offered in 2007, the company also avoided potentially massive damages.
The company said it faced the possibility of a crippling, billion-dollar judgment after Pike Circuit Judge Steve Combs ruled it had missed a deadline to deny allegations in the lawsuit. That ruling meant the company admitted the damaging claims, giving the state a huge advantage in the case.
The company appealed the ruling to the state Supreme Court, which has not ruled. The company will drop the appeal as part of the settlement.
Conway also announced his office settled a claim this week over alleged false marketing of Risperdal, an antipsychotic drug approved by the FDA to treat schizophrenia and acute mania associated with bipolar disorder.
The drug is made and marketed by Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, Conway said.
The state accused the company of misleading consumers about the dangers of the drug and marketing it for unapproved purposes.
For instance, Janssen marketed Risperdal for use in treating dementia in some patients, even though it had a study showing the drug doubled the risk of death in older people, Conway said.
The company did not admit wrongdoing in the settlement with Kentucky but agreed to pay $15.5 million, Conway said.
“Both companies knowingly and aggressively marketed drugs they knew to be harmful in order to drive profits,” Conway said of Purdue Pharma and Janssen. “I am pleased we were able to recover damages for the commonwealth and recover funds to help expand addiction treatment in Kentucky.”