3 Executives Spared Prison in OxyContin Case

http://www.nytimes.com/2007/07/21/business/21pharma.html?ref=business

July 21, 2007
3 Executives Spared Prison in OxyContin Case
By BARRY MEIER

ABINGDON, Va., July 20 — After hearing wrenching testimony from parents of young adults who died from overdoses involving the painkiller OxyContin, a federal judge Friday sentenced three top executives of the company that makes the narcotic to three years’ probation and 400 hours each of community service in drug treatment programs.

In announcing the unorthodox sentence, Judge James P. Jones of United States District Court indicated that he was troubled by his inability to send the executives to prison. But he noted that federal prosecutors had not produced evidence as part of recent plea deals to show that the officials were aware of wrongdoing at the drug’s maker, Purdue Pharma of Stamford, Conn.

The sentences announced by Judge Jones came at the end of a lengthy and highly emotional hearing at a small brick courthouse in this town in far western Virginia. Parents of teenagers and young adults who died from overdoses while trying to get high from OxyContin arrived here from as far away as Florida, Massachusetts and California.

Given the opportunity to speak, they both memorialized their lost children and lambasted Purdue Pharma and its executives, saying they bore a responsibility for those deaths. They also urged Judge Jones to throw out the plea agreements and send the executives to jail.

“Our children were not drug addicts, they were typical teenagers,” said Teresa Ashcraft, who said that her son Robert died of an overdose at age 19. “We have been given a life sentence due to their lies and greed.”

Another women held up a jar that she said contained the ashes of the dead son.

OxyContin, which is a long-acting time-release form of the narcotic oxycodone, is used to treat serious pain. Several reports have suggested that Purdue may have helped fuel widespread abuse of the drug by aggressively promoting it to general practitioners not skilled in either pain treatment or in recognizing drug abuse. The company has denied such a connection. Among those who testified at the hearing were some patients who told about the pain relief they received from OxyContin.

This bucolic town is not far from the spine of the Appalachian Mountains and Kentucky and Tennessee, where abuse of OxyContin exploded in early 2000, just a few years after it was first sold. Both addicts and young experimenters quickly discovered that a pill needed only to be chewed or crushed before ingesting to release large doses of oxycodone, which produced a heroinlike high.

In May, a holding company affiliated with Purdue Pharma pleaded guilty to a felony charge that it had fraudulently claimed to doctors and patients that OxyContin would cause less abuse and addiction than competing short-acting narcotics like Percocet and Vicodin. The Food and Drug Administration had allowed the company to claim only that it “believed” that the drug, because it was long-acting, might be less prone to abuse.

To settle that charge, Purdue Frederick, the holding company, agreed to pay $600 million in fines and other payments, and the executives agreed to pay $34.5 million in fines. In accepting that deal, Judge Jones put the company on five years’ probation.

In a statement issued Friday, Purdue Pharma said that “Judge Jones’s acceptance of the settlement concludes this matter and we welcome its resolution.”

That ruling, however, does not mean the end of legal problems for Purdue Pharma, which is owned by the Sackler family, known for its contributions to institutions like the Metropolitan Museum of Art in New York. A number of insurers have filed lawsuits against it seeking compensation for what they say were unnecessary prescriptions for OxyContin, a very expensive drug.

Defense lawyers for the three executives involved — Michael Friedman, the company’s president until recently; Howard R. Udell, its top lawyer; and Dr. Paul D. Goldenheim, its former medical director — all urged Judge Jones not to put their clients on probation.

The executives had pleaded guilty to misdemeanor charges of misbranding, a crime that does not require prosecutors to show that they knew about wrongdoing or intended to defraud anyone. And defense lawyers said they were only here today because they headed Purdue Pharma at a time when others were committing crimes.

They also described their clients in glowing terms. For example, Mary Jo White, a former United States attorney in New York who represented Mr. Udell, described the lawyer as the “moral compass” of Purdue Pharma. Had he known about wrongdoing, Ms. White said, he “would have done everything in his power to stop it.”

Judge Jones appeared unmoved by such arguments. And while he said a lack of jail time was the “most difficult” part of accepting the plea agreements, he added that his hands were legally tied because prosecutors had not provided him with evidence on which to act.

Still, he appeared to be sending out a message by placing the executives on three years of probation and ordering them to perform 400 hours of service in either a drug abuse prevention program or drug addiction treatment program.

“As we have heard today, prescription drug abuse is rampant in all parts of this country,” Judge Jones said.

At an earlier outdoor rally Friday attended by about 50 people, including many of those who would later testify at the hearing, there was ample testimony to that problem.

Assembled around a bandstand where speakers stood to castigate Purdue Pharma as a “corporate drug pusher” were photographs of teenagers and young adults at parties, family trips or graduation ceremonies.

The legend over one young man’s photograph read “One Pill Killed.”