Firm admits deceit about painkiller

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.