Purdue, executives handed hefty fine

The deal ordering $634.5 million over OxyContin's marketing is one of the largest such fines.

Stephanie Klein-Davis | The Roanoke Times

Larry Golbom of Florida speaks at a rally in Abingdon, Va., against the company that made and marketed OxyContin.

ABINGDON, Va. --A pharmaceutical company and three executives were fined $634.5 million Friday for the deceptive marketing of OxyContin, a painkiller that reaped billions for the company and misery for its victims.

Before accepting a plea agreement between federal prosecutors and Purdue Pharma, Judge James Jones said he was troubled by the lack of jail sentences for three company officials.

"While this may not be a popular decision, my job is not to make popular decisions but to follow the law," Jones said.

Earlier in the day, the three Purdue executives sat impassively through emotional statements by people who blame them for the overdose deaths of their loved ones. Other speakers recounted their own near-death experiences with addiction to a potent painkiller hailed by the company as a miracle drug in the fight against pain.

One woman brandished an urn holding the ashes of her cremated son at the defendants.

"This is from your drug, OxyContin, and here he is, in this courtroom," said Lee Nuss of Palm Coast, Fla., whose 18-year-old son, Randall, died from an overdose. "Here he is, for you all to see."

Friday's sentencing in U.S. District Court in Abingdon ended a lengthy federal investigation that forced guilty pleas from a company that has long argued it should not be held responsible for what happens when its painkiller is abused.

It also put three millionaires in the defendant's chair, forcing them to travel from Connecticut, where Purdue is based, to a small mountain town that once was an epicenter of OxyContin abuse.

Also making the trip to Abingdon were about 50 people from around the country who held a vigil near the courthouse in a steady rain before going inside.

"Gentlemen, you are responsible for a modern-day plague," the mother of an addict told Michael Friedman, Howard Udell and Paul Goldenheim. Other speakers called the three men monsters, corporate drug lords, sheer evil and as bad as Adolf Hitler.

At a hearing in May, Purdue and its three executives admitted to their roles in misbranding the drug or misleading doctors about its propensity for abuse and addiction during a nationwide marketing blitz.

At the time, Friedman was the company's president and chief executive officer, Udell was its chief legal counsel and Goldenheim was the director of medical affairs. Friedman and Goldenheim have since retired.

Jones placed all three men on probation for three years and ordered them to perform 400 hours of community service related to treatment or education issues involving prescription drug abuse.

"I do not doubt that many of our fellow citizens, with only a passing knowledge of this case gleaned from the headlines, will deem it inappropriate that no jail time is imposed," the judge said.

"It bothers me, too."

However, Jones said it would be improper to send someone to jail for something they didn't actually do.

Under a rarely used law, Friedman, Udell and Goldenheim were held criminally accountable for misbranding committed by other company officials. In order to obtain convictions, prosecutors did not have to prove they even knew that crimes were being committed under their watch.

Not only were the convictions based solely on the executives' positions of responsibility, there was also no evidence to link the misbranding to rampant abuse of OxyContin.

"It does not for one minute disrespect the suffering of these families to say that there is absolutely nothing ... to suggest that the misbranding in any way contributed to, let alone was responsible for, their suffering," said Howard Shapiro, a Washington, D.C., attorney who represented Purdue.

Although prosecutors have alluded to such a connection, they did not have to prove one.

Under the plea agreement, Friedman, Udell and Goldenheim paid combined fines of $34.5 million for their misdemeanor offenses

Purdue Frederick, the parent company of Purdue Pharma, pleaded guilty to a felony of misbranding with the intent to defraud. It will shoulder the remaining $600 million in fines and forfeitures. Most of the money will go to cover losses by government programs that paid for OxyContin prescriptions and to other state and federal agencies.

The fine is one of the largest ever assessed against a pharmaceutical company.

In asking Jones to accept the plea agreement, Assistant U.S. Attorney Randy Ramseyer said the "unprecedented" convictions will force the entire industry to be more vigilant in guarding against prescription drug abuse.

"By pleading guilty, they are admitting that doing nothing is not good enough," Ramseyer said. "They should have done something."

Before Friday's sentencing, about 50 people attended a rally near the courthouse, holding posters with slogans such as "Oxy kills" and "Purdue Pharma murdered my wife."

Speakers read the names of people from across the country who died from OxyContin overdoses. The list was 50 pages long. They had only read the first 10 pages before it was time to leave.

Robert Palmisano, a recovering addict, wiped tears from his eyes as he read the names in a voice that often broke.

"It almost took my life. I know people whose lives it took. It doesn't need to take any more," Palmisano said.

In far Southwest Virginia alone, more than 200 people have died in the past decade from overdoses of oxycodone, an opium-based narcotic that is the active ingredient in OxyContin. Police have also reported dramatic increases in crime as addicts turn to fraud, theft and violence to support their habits.

U.S. Attorney John Brownlee has called OxyContin one of the worst prescription drug failures in the nation's history.

"Every time someone hears the word OxyContin, they will think in their minds, that's the drug the company was convicted for," Brownlee said. "I think that goes a long way."

www.sptimes.com/2007/07/21/Worldandnation/OxyContin_execs_hear_.shtml

OxyContin execs hear Tampa mom's anguish at sentencing

Julie Rinaldi drove north to tell of her daughter's death. Still, no jail for the executives who misbranded the drug.

By ABBIE VANSICKLE
Published July 21, 2007

Julie Rinaldi, mother of Sarah Nicole Rinaldi, who died when she was seventeen from taking oxycontin, gets some comfort from her friend Lynn Locascio of Palm Harbor. The two were at a rally held by victims' families before the sentencing hearing.
	[AP photo]

[Times photo: Brian Cassella]

Sarah Rinaldi was 17 when she died in June 2006 of a combination of OxyContin and other drugs. A New Tampa high schooler, Sarah took a deadly dose of drugs after a night at an Ybor City nightclub.

[Times photo: XXXX]

Larry Golbom of Clearwater speaks passionately at a rally in Abingdon about Oxycontin abuse.

Breaking News Video

ABINGDON, VA - The federal judge had people just like Julie Rinaldi in mind when he invited anyone victimized by powerful painkiller OxyContin into his rural Virginia courtroom to speak before he sentenced drug executives.

The Tampa mom packed a snapshot of her dead daughter with her on the trek to the tiny town tucked into the Appalachian hills. Another mom brought her son's ashes into court in an urn. Others carried the painful memories of young lives ended.

U.S. District Judge James Jones sentenced three top executives with Purdue Pharma Friday, accepting a plea agreement that fined the Connecticut company and executives $634.5-million. The judge agreed to the deal, but added three years probation with community service for each executive.

They were pleading guilty to a misdemeanor charge of misbranding a drug, and could have been sentenced to up to a year in jail.

Jones was visibly troubled that the agreement did not include incarceration or designate a specific amount of money for rehabilitation and education, but prosecutors said the deal would bring justice in the long-running case.

After hearing more than two hours of poignant stories from the victims, the judge decided to add a personal touch to the sentence.

He required that each of the three executive spend their probation doing community service helping people who are dealing with prescription drug abuse.

"It's not perfect - I'm the first one to admit that - but it's fair, and it's just," said U.S. Attorney John Brownlee.

Julie Rinaldi's daughter, Sarah, was 17 when she died in June 2006 of a combination of OxyContin and other drugs. A New Tampa high schooler, Sarah took a deadly dose of drugs after a night at an Ybor City nightclub.

Since then, her mother and circle of suburban friends have gotten quite an education in the painkiller and addiction.

Online they learned of the U.S. attorney's case against the makers of OxyContin, a case set against the backdrop of the rural poverty of southwestern Virginia, among the first communities to report a connection between the painkiller and addiction.

Online the women also learned OxyContin-maker Purdue Pharma claimed the drug's marketing campaign was a victimless crime. So when Rinaldi and her friends heard the judge wanted to hear from anyone who felt otherwise, they headed north.

Kim Lang, 43, another Tampa mom whose son struggles with prescription drug abuse, drove more than 12 hours to get to the courthouse. She brought her son, Justin Skamarycz, 20, with her. They stopped to pick up Rinaldi, 47, who was vacationing in Gatlinburg, Tenn. They wore matching pink-and-black T-shirts that read "Pink Star," the foundation Rinaldi started to help others battling drug abuse.

Rinaldi and Lang want to tell other parents they're not alone, that prescription drug abuse is not the fault of teens or bad parenting.

"I played jazz music to him, I read books to him when I was pregnant," Lang said. "They blame the kids. When they're done blaming the kids, they blame the parents."

As rain beat down, Rinaldi and Lang wrapped clear plastic scarves over their heads and tried to stay dry, joining about 50 people for a rally in an Abingdon park. They carried pink signs with Sarah's picture and a banner.

They listened as people from around the country shared their pain. A group of mothers from Massachusetts in blue T-shirts. A California doctor and his wife whose son died. A Largo man who hosts a radio show on prescription drug abuse.

The judge gave each person two minutes to tell their story.

Rinaldi wanted to show the judge Sarah's face, but photos weren't allowed. Soaked to the bone, she changed into fresh clothes for court and carried a few notes to calm her nerves.

People spoke in alphabetical order, and the judge let them exceed the time limit. Many spoke firmly, and directed comments at the three executives: Michael Friedman, the company's former president, attorney Howard Udell and former medical director Dr. Paul Goldenheim.

As Rinaldi walked to the lectern, she thought of Sarah. She was doing this for her girl.

"I'm just here as a mom, a mom that will never be called Grandma," she told the judge, her voice steady and clear. She didn't say what punishment she hoped for, only that she wanted accountability for the executives. She told him about the deaths in the Tampa Bay area, that on the drive up she got a call about another teen's death.

"Nobody is being held responsible for anything these days," she said.

As Lang sat watching her friend, she wanted to stand up and demand answers, like in one of those movies.

"Right now, I want to be Erin Brockovich," she said.

Attorneys for the three defendants said their clients were all moral and upstanding men. They also said none of them participated in the false marketing of the drug, which violated company policy.

The defense also put on witnesses who said they had been helped by OxyContin.

Dillie R. Walker, 48, a tool and die maker from Bay City, Mich., who suffered a back injury on the job, said that after he started taking OxyContin, "I felt better for the first time in years."

It was 4:20 p.m. by the time the judge announced his decision.

"While this may not be a popular decision, my job is not to make popular decisions but to follow the law," Jones said.

The executives didn't have any comment on the sentence. The prosecutors said they were pleased with the sentence.

"The judge got it right," Lang said. "It sends a message to corporate America. You will be held accountable."

Rinaldi felt she had done right.

"I was just thinking about my girl and getting her some kind of justice," she said.

By Debra McCown

E-mail

ABINGDON � Three Purdue Pharma executives will each serve three years probation and do 400 hours of community service for their corporation�s misbranding of the drug OxyContin, a federal judge ruled Friday.

The community service will be "related to prescription drug abuse treatment and prevention," U.S. District Judge James Jones said.

The drug has been blamed for hundreds of deaths in Southwest Virginia and hundreds more across the nation.

The three men pleaded guilty in an agreement that their sentences would not include prison time, and their attorneys argued Friday the guilty plea itself was a harsh punishment. Mary Jo White, Howard Udell�s attorney, went so far as to say it was a "personal tragedy" for her client.

Jones said the lack of time behind bars bothered him, but he accepted the plea agreements, adding probation and community service to monetary penalties agreed upon in the settlement.

"While it may not be a popular decision [to accept the plea agreements], my job is not to make popular decisions, but to follow the law," Jones said.

Purdue Pharma admitted guilt in May to felony misbranding of a drug with intent to defraud or mislead. The executives pleaded guilty to one misdemeanor apiece for being the responsible corporate officers when the misbranding occurred.

As part of the plea agreement, the company agreed to pay $634.5 million, and the three executives � Michael Friedman, Udell and Paul Goldenheim � agreed to pay a combined $34.5 million.

The total makes it one of the largest drug company settlements in history, and it comes after the failure of more than a hundred civil lawsuits against the company.

"Judge Jones� acceptance of the settlement concludes this matter, and we welcome its resolution," reads a statement released by Purdue immediately after the ruling.

"�we have worked for years with the medical community and law enforcement to fight illegal trafficking of our and other prescription medicines. We will continue to do so."

The plea agreement was made to avoid prison time; the executives� crime carries a penalty of up to a year behind bars.

Jones imposed the probation and community service in addition to the financial penalties negotiated in the plea agreement, in which both the company and executives waived their right to appeal their sentencing.

U.S. Attorney John Brownlee said he hopes the unprecedented ruling will put some heat on drug company executives to make sure their products are marketed accurately.

"My hope is that other pharmaceutical companies see what happened here today," Brownlee said. "A big part of this case is deterrence."

He also noted that a portion of the settlement � $130 million � is set aside for paying private civil claims.

"It�s not a cap, that�s just an amount that we require that they set aside," Brownlee said.

He said the federal investigation into Purdue�s marketing practices began as the result of the devastating effects of OxyContin use in Southwest Virginia.

Local law enforcement officials say the drug appeared suddenly as the pill of choice among illegal drug users.

"In the late �90s, I was in charge of the drug unit, and I remember the first OxyContin [undercover] purchase we ever made off an individual here, and at that time � we had to call a pharmacist to see [what it was]," said Maj. Greg Baker, deputy police chief in Bristol Virginia.

"And we called the pharmacist and he told us what schedule it was, and from that moment on it was like it just suddenly was here."

Recently, the drug has become less prevalent in the area, law enforcement officers say, but for several years it wreaked havoc on the region.

When it is crushed and ingested all at once, the time-release pill is said to have effects similar to that of heroin � and it can be lethal.

Because of this effect, many of the young people who�ve died from OxyContin overdoses were what activists call a "one-pill kill."

About 75 people from around the nation withstood rain in Abingdon on Friday to talk about how the drug has damaged their lives and hear how it has damaged the lives of others.

They called for severe punishment of the Purdue Pharma executives and stricter control of OxyContin.

The buzz outside the courthouse after the ruling was that they were glad Jones gave the executives more than just a financial

About OxyContin

OxyContin contains oxycodone, a very strong narcotic pain reliever similar to morphine. Because OxyContin is time-released, breaking, chewing or crushing it may result in overdose. It is intended to relieve moderate to severe pain that is present all the time. Combining OxyContin with sleeping pills, tranquilizers and other pain medications, or with alcohol, may result in injury or death. Taking OxyContin daily can result in physical dependence.

Source: U.S. Food & Drug Administration

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 had lawsuits against it seeking compensation for what they say were unnecessary prescriptions for OxyContin, a very expensive drug, that were written because of the company�s false marketing claims.

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 their only crime was heading Purdue Pharma at 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 a drug abuse or drug 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.�