The three former Purdue Pharma executives who pled guilty to misbranding OxyContin are battling the government for the ability to work in the health care sector. They have sued HHS for barring them from participation in government health programs for 12 years.

Former CEO Michael Friedman, former Chief Legal Officer Howard Udell and former executive VP-Medical & Scientific Affairs Paul Goldenheim, claim that their exclusion from Medicaid, Medicare and other governmental programs is unjust since there was no accusation made against them and no evidence that they committed any unlawful act or were aware that any other Purdue employees acted unlawfully.

They contend in a pair of suits that HHS' decision is based on their pleas to a no-fault misdemeanor charge brought under the "responsible corporate officer" doctrine of the Food, Drug, and Cosmetic Act. They say the doctrine permitted them to be charged and convicted "soley because of their status as senior executives" at Purdue at a time when some Purdue sales personnel made misstatements about OxyContin.

The application of the "Park doctrine" in the case was seen as a signal to other health care executives that they should expect strict enforcement (¹ Also see "Execs Need To Heed Park Doctrine – Former FDA Officials" - Pink Sheet, 20 June, 2008.).

Friedman and Udell filed suit in the U.S. District Court for the District of Connecticut and filed a separate suit with Goldenheim in the U.S. District Court for the District of Columbia. Both complaints were filed on Oct. 28. Corporate Counsel reported that the suits were unsealed on Dec. 7. On Dec. 23, Friedman and Udell filed a motion requesting that the suit pending in Connecticut federal court be transferred to the D.C. court.

Exclusion Rationale Is First of Its Kind

The former Purdue execs seek a declaratory judgment that HHS' order barring them from government health programs is contrary to law, arbitrary and capricious and an abuse of discretion and request an order vacating their exclusions.

They say the prohibitions that accompany exclusion from government programs virtually preclude them from gainful employment in a pharmaceutical or health care company that markets products in the United States. They note that Udell had to relinquish his job as vice president and chief legal officer at Purdue and now serves only in a consultant capacity.

Friedman, Udell and Goldenheim pled guilty to misbranding the opioid analgesic in 2007 as part of Purdue's settlement with the Department of Justice to resolve an investigation of the drug's promotion. The government charged that Purdue sought to increase sales of OxyContin by claiming the drug was less addictive and less likely to cause withdrawal symptoms than other pain medications.

The company itself pled guilty to a single felony count of misbranding and with its executives paid a total of $634.5 million (² Also see "Purdue Execs Plead Guilty To Misbranding OxyContin; Company Pays $700 Mil." - Pink Sheet, 14 May, 2007.). Friedman paid $19 million, Udell paid $8 million and Goldenheim paid $7.5 million.

It was the first time in about 30 years that the government invoked the "responsible corporate officer doctrine." The former execs say their exclusion from government programs is the first time exclusion has been imposed based on the doctrine.

The outcome of the case has ramifications for industry, as the government has indicated it will continue to vigorously pursue health care fraud in the Rx drug sector. It's uncertain whether other executives will face convictions, however, since individual officers have rarely been held liable in health care fraud cases. For example, the government's record-breaking $2.3 billion settlement with Pfizer over off-label marketing and kickbacks to health care providers did not indict any company officials. Prior to the settlement two sales reps reached plea agreements with the government (³ Also see "Pfizer Sales Manager Gets Probation for Deleting Bextra Off-Label Data" - Pink Sheet, 27 July, 2009.).

It's unclear what was different about the Purdue case. The government alleged that Purdue trained sales reps to tell health care providers OxyContin was less addictive than other pain medications and that patients could discontinue it without experiencing withdrawal. But Friedman and Udell contend that they had no role in or knowledge of this.

"Since plaintiffs were charged based on no misconduct at all, their pleas cannot have involved misconduct causing harm to federal health care programs or lasting more than one year," their complaint states.

- Brenda Sandburg ( ⁴ b.sandburg@elsevier.com )

Former Purdue Execs Fight Exclusion From Gov't Programs After OxyContin Case

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