Purdue seeks a post-Oxy identity for its business

Elimination of sales force may come too late to save reputation, experts say

At the beginning of the year, Purdue Pharma employed a sales force of about 400. Last week, the total plummeted to zero.

The Stamford-based OxyContin maker’s elimination last week of its sales team represented the latest in a series of mass layoffs tied to a strategy aimed at reducing the company’s dependence on opioid sales — which are the target of hundreds of lawsuits — and focusing more on the research and development of treatments for cancer and nervous-system disorders. Experts said the shifts are not surprising, but that the company would need much more than a reorganization to resolve its controversial role in the U.S. opioid crisis.

“In order to stay potentially viable as a business, they need to focus on the R&D of non-addictive drugs,” said Angela Mattie, a professor in the schools of business and medicine at Quinnipiac University. “A drug that could cure cancer would help them with their lines of business and could also help them to address their terrible PR. The train has left the station on this one: They can no longer ride the OxyContin train.”

Shifting focus

The disbanding of the sales force cost about 175 employees their jobs. Another 175 positions were cut at the same time. About 90 of those laid off last week worked in Stamford.

About 550 remain with the company, including some 250 who still work at its downtown headquarters, at 201 Tresser Blvd. Just three months ago, the company reported employing about 1,100.

The organizational changes have accelerated since Craig Landau took over in June 2017 as president and CEO.

He took the top post after

leading Purdue Pharma Canada as president and CEO. He previously served as the company’s chief medical officer.

Purdue has not made Landau available for an interview with Hearst Connecticut Media since he became chief executive.

Among related moves, the company announced last February it would no longer market OxyContin and other opioids to medical prescribers, a move that led to the firm slashing its sales contingent by more than 50 percent, to about 200.

As part of the February announcement, Purdue had said remaining sales representatives would focus on Symproic, which treats opioid-induced constipation in adult patients with non-cancer chronic pain, and other potential non-opioid drugs.

Since February, questions and requests for information about the company’s opioid products have been handled through direct communication with its Medical Affairs department.

Moving away from opioids is “definitely a risk, but it seems like a risk worth taking,” said Robert Seamans, an associate professor of management and organizations at New York University. “To a certain extent, it seems like these types of sharp turns in strategy work better when private companies are making them. And since the CEO comes from the R&D side of the business, it sounds like they have the right person in place, now they have decided to pursue R&D instead of sales.”

Before Landau’s arrival, the company ended its promotional-speaker programs for OxyContin and another opioid, Butrans, at the end of 2016 and discontinued in late 2017 its speaker series for a third opioid, Hysingla.

Changing times

Purdue is pulling back from its traditional focus on opioids as medical prescribers rein in the amount of painkillers they give to patients and state legislators around the country increasingly restrict use of medical narcotics.

Prescription opioid volume peaked in 2011 at 240 billion milligrams of morphine equivalents and then declined by 29 percent, to 171 billion, in 2017, according to health care analytics firm Iqvia. Last year saw the largest single-year change, with a 12 percent drop.

“Purdue has gotten rid of their sales force, but the impact on patients has already happened with all of the laws put in place at a state level, across the country,” said Marghie Giuliano, CEO of the Connecticut Pharmacists Association.

In line with the overall drop in opioid use, sales of OxyContin have fallen in recent years. OxyContin produced $1.8 billion in sales in 2017, down from $2.8 billion five years earlier, Bloomberg has reported. Those numbers are based on data from health care analytics company Symphony Health Solutions.

“We’re seeing a continued loss in the enthusiasm that there once was for selling opioids,” said Dr. Jeff Gordon, a blood and cancer specialist who is the immediate past president of the Connecticut State Medical Society. “The reality now is that because we know more about the dangers of the drugs, there is no longer a need to be aggressive in marketing the opioids.”

Ongoing controversy

The organizational overhaul is unlikely to relieve the pressure from the hundreds of lawsuits filed by local and state governments that allege Purdue has stoked the national opioid crisis through deceptive marketing of opioids such as OxyContin.

From 1999 to 2016, more than 200,000 people in the U.S. died from overdoses related to prescription opioids, according to the Centers for Disease Control and Prevention. Overdose deaths involving prescription opioids were five times higher in 2016 than in 1999, while sales of those drugs quadrupled, the CDC said.

Among the latest complaints, Massachusetts’ attorney general and city officials in Norwalk and Danbury announced recently they were suing Purdue.

Since the beginning of May, the attorneys general of Florida, Nevada, North Carolina, North Dakota, Tennessee, Texas and Utah have also filed lawsuits. In total, 24 states and Puerto Rico have sued the company.

Purdue officials have denied the lawsuits’ allegations, but they have said in statements that they share medical professionals’ and public officials’ concerns about the opioid crisis. They point to initiatives such as funding that gives police officers across the country kits and training for the opioidoverdose-reversing drug naloxone.

Meanwhile, a Clevelandbased federal judge, Dan Polster, is overseeing “multidistrict litigation” comprising several hundred of the complaints filed against Purdue and other opioid makers and distributors.

Settlement discussions have made “good progress,” Polster has said. But three cases — two of which name Purdue as a defendant — could be heard in a trial starting next March.

At the same time, several hundred other lawsuits against Purdue and other pharmaceutical firms that are not included in the multidistrict group are proceeding through the courts.

“In my opinion, it’s way too late to reverse the damage to their reputation,” Mattie said. “Too much harm has occurred due to the lack of transparency and honesty in what they knew about the addictive nature of OxyContin.”