The maker of the painkiller OxyContin and three of the company's top current and former executives will pay $634.5 million in fines after pleading guilty Thursday to charges that they misled the public about the drug.
A Justice Department spokeswoman said it was one of the largest financial penalties ever assessed against a drug maker.
Stamford, Conn.-based Purdue Pharma was accused of making claims that OxyContin was less addictive and less subject to abuse than other pain medications and continued to do so despite warnings to the contrary from doctors, the media and members of its own sales force.
"In the process, scores died as a result of OxyContin abuse and an even greater number became addicted to OxyContin," U.S. Atty. John Brownlee of the Western District of Virginia, whose office brought the case, said in a statement.
The charges stemmed from sales practices used from 1996 to mid-2001.
It was the latest black eye for OxyContin, a drug that has been linked to hundreds of overdose deaths and is a favorite of drugstore thieves and illicit online drug buyers. Called by such street names as hillbilly heroin and oxy, the drug has been linked to celebrities including conservative radio commentator Rush Limbaugh and singer/actress Courtney Love.
Perdue Pharma pleaded guilty to one felony count of fraudulently misbranding a drug. Chief Executive Michael Friedman, general counsel Howard Udell and former Chief Scientific Officer Paul D. Goldenheim each pleaded guilty to one misdemeanor count of misbranding a pharmaceutical.
Under the agreement, Perdue Pharma will pay $600 million in penalties, including $160 million to reimburse state and federal healthcare programs and $130 million to resolve private lawsuits that are pending.
The three executives will pay $34.5 million in fines to Virginia.
Perdue Pharma, which sold $1.3 billion worth of OxyContin in 2004, accepted responsibility for its actions and said it had taken steps to prevent a recurrence of the problems.
The guilty pleas came two days after the company agreed to pay $19.5 million to 26 states, including California, to settle complaints that it encouraged doctors to over-prescribe the drug.
OxyContin is a trade name for oxycodone, a powerful opiate also marketed under such brand names as Percocet and Percodan. It is prescribed as a time-release pill designed to be swallowed whole and digested over a 12-hour period.
Oxycodone is a staple in the management of chronic pain, especially for cancer patients. When crushed and injected, snorted or swallowed, however, the medication's time-release effects are short-circuited, producing a heroin-like high.
The federal government estimates that of the almost 500,000 emergency room visits attributed to abuse of pharmaceuticals in 2004, more than 36,000 involved oxycodone.
Stolen from medicine cabinets or ordered illegally online, prescription drugs have become a favorite of high school and college students, ranking second only to marijuana among abused drugs, according to the U.S. Drug Enforcement Administration.
"They don't have the stigma of heroin or cocaine," DEA spokesman Garrison Courtney said. "They think because it's something doctors use, it doesn't have the same risks associated with those other drugs."
Last month, a robber cleaned out a Costa Mesa drugstore's entire stock of OxyContin. A few weeks earlier, a man was arrested in connection with a string of Orange County pharmacy burglaries in which OxyContin was among the targeted drugs.
Last spring, Limbaugh settled a drug fraud charge related to whether he had illegally obtained OxyContin. Love pleaded guilty to possessing the drug without a proper prescription.
Also Thursday, the U.S. Food and Drug Administration warned consumers not to use True Man or Energy Max dietary supplements, which are touted as treatments for erectile dysfunction. The agency said the products, which it said were distributed by America True Man Health Inc. of West Covina, contained ingredients that could lower blood pressure to dangerous levels in some users.
The company could not be reached for comment.