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Opioid Drugs

Purdue Advised to Pay Insurer Rebates Amid Opioid Crisis

— November 24, 2020

More evidence points to Purdue trying to minimize the opioid crisis.

As more details of the case against Purdue Pharma and its sales of OxyContin unfold, more information about shady business dealings is being revealed.  Court documents now show the drug maker was advised to pay rebates of up to $14,000 to health insurers for each patient negatively impacted by its opioid painkiller so that influential business relationships could be maintained amid increasing awareness of the opioid epidemic.  This was revealed in a proposal drafted in 2017 by McKinsey consultants during a time in which the drug maker began to face a number of lawsuits.

The consultants provided Purdue and members of the Sackler family with options to “rapidly address market access challenges,” presenting a slide deck to board members.  McKinsey suggested Purdue “pay rebates of $6,000 to $14,000 for any new overdose or opioid use disorder (OUD) diagnosis connected with OxyContin.”  The presentation demonstrated an estimate that OxyContin was involved in only 4% of overdose fatalities or OUD diagnoses.  This number was grossly underestimated.

Projected costs for issuing rebates to its top seven health insurers was “$3 million to $15 million a year,” the consultants maintained.  A footnote included in the deck, however, acting as a disclaimer, stated there was the “potential for unintended consequences.”

Purdue Advised to Pay Insurer Rebates Amid Opioid Crisis
Photo by Ron Dyar on Unsplash

“Not only were they trying to mitigate risks for insurance companies, but we see they knew that increased use may lead to increased deaths and the potential for future deaths.  What they were doing was considering paying these companies to accept the risks of the deaths,” said Charlotte Bismuth, a member of the PAIN advocacy group and a former New York City assistant district attorney. “They were aware of the trends and inflection point where certain actions they take can increase or not increase the number of deaths.  An awareness of their capacity to make a difference, but the number of deaths was never the factor they are considering.  There was a conscious disregard of the risks and that’s shocking to me.”

The court recently approved an $8.3 billion settlement between Purdue and the Department of Justice (DOJ).  The deal included guilty pleas to three felony criminal charges and settled all civil charges.  Purdue Pharma will be transformed into a public benefit company and run on behalf of communities who pursued litigation against is and will address the opioid crisis.  The settlement was met with criticism from states lawmakers and other plaintiffs, however, who believe it is too lenient.  The states are currently seeking documents to support their allegations that members of the Sackler family “led the dangerous conduct” at Purdue and “extracted billions of dollars,” and thus, should not be protected against civil claims following the company’s bankruptcy.  The filling was disclosed as part of these efforts.

Internal emails, presentations, and financial charts have also been released, which suggest members of the Sackler family used OxyContin sales to “stretch financial targets and pressured company executives to grow its market share for opioids by targeting high-volume prescribers and pushing higher-strength doses.”


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