‘Perverse incentive’ for sales of OxyContin sparks concerns
Stamford-based Purdue Pharma prepares to dissolve and give way to new company
STAMFORD — After gaining a judge’s approval last week for its settlement plan, Purdue Pharma could be dissolved within the next few months.
But the prescription opioid whose marketing campaigns sparked several thousand lawsuits that led to the Stamford-based company filing for bankruptcy two years ago is not about to disappear.
The product portfolio of Purdue’s planned successor company would include OxyContin, whose future revenues would help fund programs to abate the national opioid crisis which the drug is widely accused of stoking. Despite Purdue’s assurances that the new “public-benefit company” would be ethically managed, many of the company’s critics, including Connecticut Attorney General William Tong, are unconvinced by the roadmap for its top-selling drug.
“From day one, there were aspects of this plan that I disagreed with, including the public-benefit corporation,” Tong said in a statement. “I have concerns about how this new entity will ensure the safe sale and distribution of OxyContin going forward. We are closely watching this work and the safeguards
that are being put in place.”
In response to an inquiry from Hearst Connecticut Media, Purdue provided a statement in which it said that “the new company will operate in a responsible and sustainable manner, taking into account long-term public health interests related to the opioid crisis.”
Planning the end of Purdue — and the beginning of a new firm
If Purdue’s plan is implemented, it would transfer all of its assets to a successor firm known as Knoa Pharma. In addition to OxyContin, those holdings would include the opioids Butrans and Hysingla and other drugs such as Adhansia, which treats attention deficit hyperactivity disorder.
“The reality is that, as of now, a substantial amount of value and revenues come from OxyContin,” Marshall Huebner, an attorney representing Purdue in its bankruptcy proceedings, said last November in a bankruptcy hearing. “Just like tobacco companies get their cash from tobacco, we get a lot of our cash from OxyContin ... You can’t regress that out of the equation.”
In addition, the new company would also “develop and distribute millions of doses of opioid-addiction treatment and overdose-reversal medicines,” according to Purdue officials.
Knoa Pharma’s sales would help fund a National Opioid Abatement Trust, which would be the new company’s primary owner and direct money to programs across the country to tackle the opioid epidemic. Between 1999 and 2019, nearly 500,000 people in the U.S. died from overdoses involving opioids, including prescription and illicit types, according to the Centers for Disease Control and Prevention.
“If we really want to see the opioid crisis ultimately go away, we should be doing everything we can to reduce unnecessary exposure to opioids,” said Dr. Andrew Kolodny, medical director of opioid policy research at Brandeis University’s Heller School for Social Policy and Management. “If you put states in the position of benefiting financially from the sale of opioids, that creates a perverse incentive.”
Kolodny has been a paid expert for some of the plaintiffs who have sued Purdue, but he said his views on opioids are consistent with the positions he held before the lawsuits were filed.
Tong has similarly expressed concerns about the successor company being undermined by a potential conflict of interest and has called for Purdue’s assets to be sold to a private buyer. Connecticut is one of nearly a dozen states that object to Purdue’s settlement plan, despite the framework gaining the approval of Judge Robert Drain, who has presided over the company’s bankruptcy proceedings.
“It is very clear to me that the use of the bulk of the debtors’ value for abatement purposes is clearly in good faith — and, in fact, highly beneficial — to those who have individual claims against the debtors as well as the communities and states that also have claims,” Drain said during his Sept. 1 bench ruling on the plan.
Like the approximately 3,000 other lawsuits filed against Purdue that were consolidated in its bankruptcy, Connecticut has accused Purdue of deliberately misrepresenting OxyContin’s risks and benefits, deception that the state said has set off widespread addiction to the drug and other opioids.
“Hundreds of people in Connecticut have died or overdosed after obtaining prescriptions for Purdue opioids,” according to the state’s lawsuit, which was filed in December 2018.
Despite the settlement plan, Purdue denies the accusations in Connecticut’s lawsuit and other complaints that it boosted its revenues through marketing misconduct.
Separate from the lawsuits, Purdue pleaded guilty last November to three criminal charges of defrauding the government and violating anti-kickback laws related to the sale, marketing and prescribing of opioids including OxyContin. Around the same time, the Sackler family members who own Purdue reached a $225 million settlement with the Department of Justice to resolve allegations of marketing and financial misconduct. The Sacklers, however, did not admit any wrongdoing as part of that agreement.
Purdue officials said that the company has in recent years enacted major changes such as its decision in 2018 to end opioid marketing to prescribers.
They said Knoa Pharma would be tightly regulated and that the Sacklers would have no involvement in the new company. They also cited a court-ordered injunction that places numerous restrictions on its promotion of opioids.
The new company would be overseen by an independent board of managers who would function as the board of directors. Purdue’s creditors would select the board’s members.
Among other measures, former Montana Gov. Steve Bullock, who was appointed in March as Purdue’s monitor, would continue in the same role overseeing Knoa Pharma.
When the new company emerges, Purdue would be dissolved. Purdue officials have not confirmed the timeline for the restructuring, although Huebner said last week that the process could take several months.
Declining sales, lingering concerns
OxyContin has perennially ranked as Purdue’s top seller, raking in a total of nearly $24 billion in revenues between 2010 and 2020, according to health care data firm Iqvia.
But its sales decreased every year in that time span, from $3.1 billion in 2010 to $1 billion in 2020.
Its decline aligns with a broader drop in the use of prescription opioids in recent years. At the same time, OxyContin faces major competition from generic opioids which now account for the vast majority of oxycodone prescriptions, according to Iqvia. Oxycodone is the active ingredient in OxyContin.
Citing other statistics from Iqvia, Purdue officials said that OxyContin comprises less than 2 percent of the opioids dispensed from retail pharmacies in the U.S., based on both the number of pills and number of prescriptions.
Despite the plunging sales, OxyContin still ranks as the top-selling oxycodone product in the U.S. on a dollar basis, according to Iqvia. Its dominance in that category reflects the significantly higher pricing for branded drugs compared with generic equivalents.
In addition to the litigation over its marketing, a number of other concerns persist about OxyContin. Kolodny called for the prohibition of the 80 milligram version of OxyContin, which is the drug’s highest strength, because he said its risks outweigh any benefits. In court filings, Connecticut and other states objecting to Purdue’s settlement plan have also questioned whether the 80 milligram formulation should remain on the market.
“That product should not exist. It offers no advantage,” Kolodny said. “For the very people who might need extremely high doses of oxycodone, they could easily take a few extra pills of a lower dosage. Even with people dying from cancer, there are many other products that could be helpful to them.”
In response to a question from Hearst about its response to requests for a ban on 80-milligram OxyContin, Purdue said in its statement that “we follow FDA guidance, will abide by any decision the agency makes on the issue and believe that all opioids, regardless of dose, should be prescribed only when determined by a physician to be medically necessary.”
The Food and Drug Administration declined to comment on a related citizens petition that calls for the agency to take certain high-dose opioids off the market. It confirmed, however, that Knoa Pharma would not need to submit a new application for OxyContin. The agency first approved the drug in December 1995.
The Knoa name “connotes knowledge that (it) will bring to the responsible operations of a pharmaceutical company” and “also refers to ownership by the National Opioid Abatement Trust, evoking the new company’s mission and obligation to abate the opioid crisis,” Purdue said in an announcement last week. Pronounced “No-ah,” the moniker was chosen by the company’s creditors.