Drug maker Purdue Pharma’s deal to pay $67 million to settle allegations that it marketed OxyContin for unapproved uses could result in individual payouts as small as $600 to $18,000, according to legal documents filed this week in U.S. District Court for the Southern District of New York.
Purdue had charged Medicaid and Medicare $49 million in 2011 for marketing OxyContin for off-label uses of pain management. The SEC alleged in a civil complaint that Purdue failed to adequately disclose the uses, including to patients, clinicians and state Medicaid programs.
Purdue settled the charges in exchange for a resolution of the company’s largest lawsuit filed against it: a class-action suit brought by individuals and government health agencies who had been prescribed OxyContin. A judge found Purdue liable for $66.4 million. The company’s insurer agreed to cover the amount of the payouts.
But, of the 30,000-plus people who claimed a compensatory portion of the money, none got more than $10,000.
For the 2,200 or so so former participants in a smaller class-action, the settlement will amount to $12.5 million.
Victor Posner, a professor of health law at the New York University School of Law, said that while the settlement was significant, “the majority of the claims were for substantial medical care and treatment losses that do not seem anywhere near reparable.”
Most of the class-action participants said they had suffered from opioid addiction or unintentional overdose, according to court filings.
Of the 33,000 people who died in 2017 from opioid overdoses, a record high, pain patients accounted for about half of the victims, according to the CDC.
States and federal health programs are the main beneficiaries of Purdue’s settlement. The company does not dispute that.
In its company filings, Purdue described how the agreements were put in place. It said the agreements with New York, Kentucky, Illinois, Pennsylvania, California, Indiana, Michigan, Ohio, Minnesota, North Carolina, Georgia, Texas, Iowa, and New Hampshire would ensure “the payment of state Medicaid programs and/or state health programs of the amount of any recovery … as well as other equitable relief,” the filings said.
Aside from these payments, Purdue has disclosed that it has agreements with a number of insurance companies to pay claims. It makes it difficult to assess the total amount. For example, according to the company’s filing for the second quarter of this year, “the amounts related to drug wholesalers covered by our Indemnity Provider Agreements also can be a substantial component of the total amount of payouts to certain insurers.”
The U.S. District Court for the Southern District of New York found Purdue liable for $66.4 million last year. But the settlement is for only those individuals and state programs who participated in the class-action lawsuit.
Cindy Zygadlo, a spokeswoman for the district court, did not immediately respond to a request for comment.
In its filing, Purdue said there were “no judgments that are payable or other penalties that would be payable on any other claims.”
A record-setting $13 billion jury verdict against the drug manufacturer Johnson & Johnson in 2017 also included both settlements and other claims. However, Johnson & Johnson received $5.1 billion to resolve non-jury verdicts, according to court filings.