OxyContin maker won't capitulate

Steve Stanek Oct. 14, 2004, 9:48am

The makers of the painkilling drug OxyContin may have a won-loss record of 202-0 in lawsuits against the company, but that hasn't stopped litigation accusing drug maker Purdue Pharma of everything from creating drug addicts to filing fraudulent patents.

Purdue Pharma, based in Stamford, Conn., has faced more than more than 500 individual and class-action lawsuits in state and federal courts across the country since introducing OxyContin in 1995. Two hundred two of them have been voluntarily withdrawn or dismissed by courts. The remainder, including three dozen in Madison County handled by the SimmonsCooper firm, are pending.

Most lawsuits claim the drug has caused the plaintiff to become addicted or to suffer other ill effects.

The company has yet to pay one penny in out-of-court settlements or courtroom verdicts, according to Timothy Bannon, special counsel for Stamford Conn.-based Purdue Pharma, the maker of OxyContin.

Thirty-seven cases alleging drug addiction or other health problems caused by the use of OxyContin have been filed in Madison County. One of the cases has already been withdrawn, leaving Purdue Pharma to defend 36 cases in Madison County.

"We've taken a clear position. We believe in the product and in the manner in which we have marketed it," Bannon said. "We have not offered to settle any of these cases. Two hundred two of the lawsuits against us involving OxyContin have either been dismissed by the courts or withdrawn by the plaintffs. We have paid nothing in settlement of any of the 202 cases."

He said that in every case the company has investigated, not a single plaintiff has suffered the injuries claimed. In a number of cases, plaintiffs obtained the drug illegally and took it improperly.

Other claimants haven't complied with doctor's instructions or may have experienced physical problems from self-medication, such as stopping abruptly without a doctor's guidance. Some were already addicted to other painkillers or illegal narcotics, such as heroin, according to Bannon.

OxyContin litigation exploded onto the scene in 2001, when a Virginia attorney named Emmit Yeary filed a $5.275 billion class-action lawsuit against Purdue Pharma, alleging the drug was causing users to become addicted. Yeary appeared on national television to discuss the lawsuit, including Good Morning, America, but the case soon started to fall apart.

Yeary voluntarily withdrew the class allegations but retained individual claimants. By this summer only three plaintiffs were left, and on Aug. 18 a federal judge in Virginia issued a summary judgment to dismiss those cases.

"We made an early decision that if a case had no merit, we are not going to pay to have it go away," Bannon said. "We believe the nuisance value of disposing of litigation is far more serious than that. It is, in our case, a decision that was made in the best interest of good science and medicine. We're not going to capitulate by paying a settlement when none is warranted. That only encourages more litigation."

Even though the company has paid nothing to plaintiffs, damage has been done, Bannon said, because of bad publicity.

"A lot of these cases that have disappeared, like the Yeary lawsuit, were begun with great fanfare," he said. "The classic strategy is for plaintiffs' attorneys to use the press to achieve leverage in the litigation. Bad press had the potential to frighten doctors and patients away from the drug."

In July 2003, a United States Chamber of Commerce survey of doctors, pharmacists and patients found that drug lawsuits influence some people to stop taking their prescription medication.

"Plaintiff lawyers' addiction to lawsuits has changed the way doctors prescribe, pharmacists dispense and patients use medicine," said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, which commissioned the survey. "A troublesome pattern is emerging -- with even the fear of litigation interfering with the way health care professionals practice medicine."

One in four patients surveyed said they would immediately stop taking a drug prescribed for them if they saw an advertisement for a lawsuit over the medication, according to the Harris Interactive "Pharmaceutical Liability Study."

Nearly half of the pharmacists surveyed said their patients either stopped taking a properly prescribed medication (44 percent) or refused to take a medication (40 percent), because the patient discovered the drug might be the focus of a liability lawsuit. For doctors, 38 percent reported patients stopped taking and 29 percent said patients refused to take a prescribed drug because the patients found out that the medication was part of a lawsuit, according to the report.

Though Madison County has the reputation as a magnet for these kinds of cases, and despite the 36 OxyContin lawsuits still on the books in Madison County, there are other jursidictions that have also attracted a disproportionate number of cases, according to Bannon. Until the enactment of a series of tort reform laws beginning in 2002, Mississippi was an especially troublesome state for the company, Bannon said.

Recent Mississippi reforms limit awards for non-economic damages; restrict "venue shopping" by attorneys who try to file suits in the most sympathetic jurisdictions; and abolish joint and several liability, so that defendants are not responsible for damages caused by others whose liability is limited or who cannot pay their share of damages.

Purdue Pharma has even had to go against its own insurance company in court.

Steadfast Insurance in Schaumburg issued a $2 million liability policy to Abbott Laboratories in North Chicago, which has a marketing agreement with Purdue Pharma. Part of the agreement is that Purdue Pharma will defend claims against Abbott for marketing OxyContin, Bannon said.

Steadfast has spent $2 million in legal fees paying for legal defense costs in OxyContin cases and informed the company its obligations under the policy were finished.

Purdue Pharma went to court gainst Steadfast, arguing that the company has a duty to defend the lawsuits and that the insurance policy states the $2 million is for damages and settlements, not for legal fees. Last month Stamford, Conn. Complex Litigation Docket Judge Taggart D. Adams sided with Purdue Pharma, ruling that Steadfast has a duty to defend the lawsuits and that legal fees cannot be considered damages.

With more than 300 cases still pending against Purdue Pharma, there is a chance the company will end up paying damages or settling cases outside of court. And now there are lawsuits challenging Purdue's patents for OxyContin.

The first was filed last January by the Boston-based national healthcare advocacy group Prescription Access Litigation project (PAL). They filed a lawsuit in the U.S. District Court for Connecticut, alleging that Purdue fraudulently obtained its OxyContin patents.

The suit alleges that Purdue told the federal patent office that OxyContin was unique because of its effectiveness at very low dosages. The suit charges that Purdue knew there was no evidence to support this assertion at the time the company filed for the patents and therefore received exclusive rights to the drug that it did not deserve.

PAL attorney Renee Markus-Hodin said after their lawsuit was filed, "dozens with similar allegations were filed after that." In July those patent fraud lawsuits were consolidated into one lawsuit that is now in the U.S. Southern District of New York.

"Discovery has not begun yet, so there is still a long way to go," she said. "Unlike the other lawsuits, we're not claimng anything about the effectiveness or safety of OxyContin. Our cases are all about drug pricing. In this case, we're alleging that they have essentially lied to the patent office to keep their monopoly and prevent cheaper generics from entering the market."

Given the experience of the more than 200 other former OxyContin plaintiffs who have either withdrawn their lawsuits or had them thrown out of court, making the allegation is much easier to do than proving it.

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