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Purdue Pharma Is Offering Free Opioid Treatment in Legal Talks

Bloomberg logoBloomberg 9/11/2018 Jared S. Hopkins and Jef Feeley

Bottles of Purdue Pharma L.P. OxyContin medication sit on a pharmacy shelf in Provo, Utah, U.S.© Bloomberg    (Bloomberg) -- The company that created OxyContin is offering free doses of an opioid-abuse treatment as part of its offer to resolve more than 1,000 lawsuits accusing the drugmaker of helping fuel the opioid crisis, according to people familiar with the negotiations.

Purdue Pharma has repeatedly said it will give away doses of a new version of buprenorphine -- which helps wean people addicted to opioids off the drugs -- as part of any settlement, according to four people familiar with the talks sponsored by state attorneys general and a federal judge. They asked not to be cited by name as the negotiations are confidential.

The new version of the drug is based on a patent that lists billionaire physician and past Purdue president Richard Sackler as one of six inventors. Sackler’s father co-founded Purdue. A spokesman for the company declined to comment on the talks.

It’s another sign that opioid makers and drug wholesalers are looking for an exit from litigation over their alleged role in a crisis that kills more than 100 Americans daily that could result in billions of dollars in penalties. Bloomberg News reported last week that Endo International Plc is seeking to resolve all lawsuits over its Opana painkiller to cap its legal exposure and get out of an industry-wide settlement.

“I’d have to say this is a pretty clever move,” said Richard Ausness, a University of Kentucky law professor. “Over the last 20 years, Purdue hasn’t shown any real contrition or remorse, so I see this offer of free step-down drugs as a savvy negotiating tactic to limit what they have to pay in any settlement.”

Click here for more on Endo’s efforts to settle the opioid litigation

Buprenorphine, first approved by the U.S. Food and Drug Administration in 2002, has been shown to be effective for treating opioid use disorders. It’s available in tablet and film forms, although Sackler’s patent references a wafer that could dissolve faster. It’s held by Rhodes Pharmaceuticals LP, a drugmaker also owned by the Sacklers. Rhodes didn’t respond to a request for comment. Sackler’s patent was first reported by the Financial Times.

Last week, the FDA signed off on another version of Buprenorphine. Other approved forms of medication-assisted treatment include methadone and naltrexone.

Purdue’s offer adds to its efforts to refashion the company as an advocate for fighting the addiction crisis while fighting back court cases. It’s also helped fund distribution of opioid-overdose antidote naloxone, purchased ads in the press touting its efforts, and pledged $3.4 million to a nonprofit firm developing a cheaper version of naloxone.

Click here for more on Purdue’s goodwill efforts

Purdue’s pledge fits a pattern of its fellow defendants making charitable efforts that could build goodwill and facilitate settlement talks. Wholesaler Cardinal Health Inc. has given at least $3 million to about 70 organizations while McKesson Corp. seeded a stand-alone nonprofit dedicated to fighting the opioid-abuse crisis with $100 million.

Purdue’s offer might provide treatment options desperately sought by communities and states suing the company, but it’s also likely a tactic to shave off their financial contribution to a global settlement and appeal to U.S. District Court Judge Dan Polster, who is overseeing the litigation, said Alexandra Lahav, a University of Connecticut School of Law professor.

“If this is part of settlement talks, then it’s not just about goodwill -- it’s really saying, ‘I’m sweetening the deal,’” she said. “Whatever people are willing to agree to, they can do. The question is, is the judge going to feel if the companies are doing enough in light of exposure?”

Health Risks

More than 49,000 people died from an opioid overdose last year, an increase of almost 7,000 from the previous year. The governments accuse drugmakers and wholesalers of downplaying the health risks and overselling painkillers’ benefits through marketing campaigns. Plaintiffs are seeking to recoup the societal costs of dealing with addictions and overdoses as part of a settlement they hope would be similar to the 1998 Big Tobacco accord that ultimately generated $246 billion.

Polster has urged the sides to reach a settlement that helps address the roots of the opioid problem and not just move money around. Purdue’s offer appears to meet that on some level, Ausness said. “This kind of free-drug offer is a tangible, non-monetary benefit of a settlement,” he said.

Companies facing lawsuits regularly seek ways to influence public opinion. Researchers at Harvard Business School who studied 20 years of lawsuits against public companies found that targeted local advertising increased by 23 percent after lawsuits were filed, and that they increase the probability of a favorable outcome.

The consolidated case is In Re: National Prescription Opiate Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

©2018 Bloomberg L.P.

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