They Haven't Got Time For The Pain

It's been more than three years since Purdue Pharma L.P. decided to take a hard stand against suits challenging its core product, the billion-dollar painkiller OxyContin. The Stamford, Connecticut-based company set out to fight the cases aggressively, using top-notch hired guns [Purdue Pharma's Pain Killer, September 2002]. And the company vowed it wouldn't pay a dime in settlements. Ever.

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It’s been more than three years since Purdue Pharma L.P. decided to take a hard stand against suits challenging its core product, the billion-dollar painkiller OxyContin. The Stamford, Connecticut�based company set out to fight the cases aggressively, using top-notch hired guns ["Purdue Pharma's Pain Killer," September 2002]. And the company vowed it wouldn’t pay a dime in settlements. Ever. Three hundred eighty suits later, has Purdue’s strategy worked? On the surface, it seems so. No cases have made it to trial. The pace of new filings has slowed. And more than 70 cases have been dismissed, most by the plaintiffs themselves. But it hasn’t been clear sailing, especially of late. Though neither Purdue nor its outside counsel will say exactly how much the strategy has cost, all involved admit that it’s been an expensive one. More troubling are some recent developments: the certification of a class of Ohio OxyContin users and the threat of another in Kentucky; a whistle-blower suit by a former Purdue scientist; a federal investigation into Purdue’s marketing practices; and more bad press for OxyContin with the news that radio talk show host Rush Limbaugh was addicted to the drug. The Ohio Supreme Court has agreed to hear Purdue’s challenge to the class in the next couple of months. Ohio plaintiffs counsel Stanley Chesley of Cincinnati’s Waite, Schneider, Bayless & Chesley predicts that if the certification is upheld, it could bankrupt the company. Purdue GC Howard Udell agrees that the stakes in the case are high. “Ohio was a setback,” he says. But even if the court doesn’t overturn the class, Udell says, “it wouldn’t change our strategy, and it wouldn’t make [the class certification] right, but we would live with it.” One reason Udell says he refuses to settle is that he believes it would only encourage more claims. But another is that the company refuses to compromise on its mission. The doctors who founded the pharmaceutical business believe that pain is undertreated and are determined to make painkillers more widely available, and for a wider range of pain. That’s just the problem, say plaintiffs. The Food and Drug Administration approved OxyContin in 1995 for moderate to severe pain, and plaintiffs � as well as some state and federal investigators � claim Purdue took that as a license to push doctors to prescribe the drug too liberally. The drug is an opioid and highly addictive. When ground up, it yields a heroin-like high. As a result, Chesley says, the drug should be restricted only to the most severe pain patients. “If you have cancer and you have three to nine months to live, I think a cancer patient should be entitled to anything they want. However, prescribing this . . . drug for toothaches and lower back pain, I think, is obscene.” Fortunately for Purdue, Udell has found outside counsel who are also true believers. He decided to pair longtime Purdue counsel Chadbourne & Parke with newcomer King & Spalding to get the best of both firms, creating “a virtual single firm” to act as national coordinating counsel. Though Udell says it’s been more expensive than having just one primary outside firm, he’s been hawkish in monitoring the bills, and insists, “We’re not paying anything near two for the price of two. Not even near it.” That’s mainly because the two leads, Chadbourne’s Donald Stauber and King & Spalding’s Chilton Varner, have worked together closely to divide the labor and make sure there’s no overlap. Chadbourne handles the initial responses to complaints, filing either the response or a request to remove from state to federal court. King & Spalding handles document requests and interrogatories. In working with local counsel, Atlanta-based King & Spalding takes the southeastern United States, leaving New York’s Chadbourne the rest. Udell refuses to set any limits on what he’ll pay to defend the drug, and spends freely on local counsel, too: “In every case, in every jurisdiction, we look for the best litigation firm that [is] capable of trying these cases. Not settling them. Not pushing papers. Not showing us around the courthouse.” Udell’s freedom to refuse even minimal settlements and spend what he wants on defense comes from Purdue’s corporate structure: It’s privately held. Unlike GCs at most big pharmaceutical companies, he doesn’t have to answer to shareholders urging leaders to “get the event behind them,” Udell says. “The plaintiffs lawyers know that this is a lever that they have � that the longer they can keep this pressure up in the public and the press, it depresses the stock prices. That’s a lever they don’t have over me.” But plaintiffs counsel do have another lever to pull: OxyContin sales account for the vast majority of the company’s revenue. In 2002 alone, $1.27 billion of Purdue’s $1.47 billion in sales came from OxyContin. So even if the suits don’t actually bankrupt Purdue, efforts to restrict the opioid’s use could inflict so much financial harm that no drug could help.

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