Drug company sued by Wyoming settles similar case with Oklahoma

CHEYENNE — A major settlement between the State of Oklahoma and the manufacturer of the drug OxyContin could have ramifications for lawsuits against the company filed by the State of Wyoming, the City of Cheyenne and several other cities around the state.

Purdue Pharma and the State of Oklahoma settled that state's lawsuit against the pharmaceutical giant for $270 million Tuesday. The company previously paid $600 million in criminal and civil penalties to the federal government in 2007 after executives pleaded guilty to false advertising related to OxyContin.

Even with Tuesday's settlement, Purdue Pharma still faces numerous lawsuits for its part in the opioid crisis. The company has been sued by 36 states, including Wyoming, and more than 1,000 municipalities for business practices litigants claim helped increase sales of the opioid-based OxyContin by downplaying the real risk of addiction the drug posed to patients.

For Wyoming and the municipalities that are in the midst of lawsuits against Purdue, the decision to settle with Oklahoma is seen as the company accepting its responsibility in the proliferation of opioids in the country.

"The State of Wyoming is following the opioid litigation in other states and is encouraged by the settlement," Gov. Mark Gordon said in an email exchange. "Early indications are that this settlement is a step in the right direction recognizing the opioid crisis in the nation."

As part of the Oklahoma settlement, Purdue will create a nearly $200 million endowment for Oklahoma State University's Center for Wellness and Recovery, which will go toward treating the ongoing addiction epidemic nationwide.

"Purdue is very pleased to have reached an agreement with Oklahoma that will help those who are battling addiction now and in the future," Craig Landau, president and CEO of Purdue Pharma, said in a statement. "We see this agreement with Oklahoma as an extension of our commitment to help drive solutions to the opioid addiction crisis, and we pledge Purdue's ongoing support to the National Center and the life-saving work it will do for generations to come."

Earlier this year, Purdue filed a motion to get Wyoming's lawsuit thrown out, citing the drug's approval by the Food and Drug Administration as a reason it should not held liable for the current addiction crisis.

The focus of the Oklahoma settlement on treatment and prevention is a sign for Cheyenne Mayor Marian Orr that Purdue is starting to take steps to help alleviate the crisis in the country.

"It shows, in my opinion, at least Purdue's acceptance of certain fault, and it's my understanding a majority of the settlement will go for addiction services within the state of Oklahoma," Orr said. "Locally, it signals to me that should settlements be made to the state and municipalities, there's a true commitment for those funds to go directly toward treatment and addiction services."

Given the massive amount of litigation Purdue is faced with, the company announced earlier this year it was considering bankruptcy, despite the billions of dollars it made off OxyContin in recent years. As part of its settlement with Oklahoma, Purdue agreed not to declare bankruptcy in the near future, which means the state's settlement is secure.

The Oklahoma settlement's large price tag, and the massive number of existing lawsuits against the company, could help encourage Wyoming, Cheyenne, and other local and state governments suing the company to settle, said Melissa Alexander, an associate professor at the University of Wyoming's School of Law.

Alexander said if Purdue eventually declared bankruptcy, it could have major ramifications for governments looking to be compensated for the cost of treating opioid addiction. Even if Wyoming or Cheyenne were to settle their suits with Purdue, if the company declares bankruptcy within 90 days of the settlement, it could invalidate that agreement.

"Is it more likely that Wyoming will settle now that Oklahoma has settled? Absolutely, it's a fair statement. But how much more likely? It's hard to know," Alexander said. "Generally speaking, if Purdue Pharma, or any other company, is willing to settle with one state to make these claims go away, they'd likely be willing to settle in other cases, as well."

One reason Purdue could have decided to settle with Oklahoma is the amount of bad press that's hit the Sackler family, which owns Purdue. The Sacklers are well-known philanthropists. But in recent months, organizations like The Guggenheim Museum in New York and the Tate in London have announced they'll refuse any more donations from the family because of their part in the opioid crisis.

The family is estimated to have made more than $4 billion since 2007 from Purdue's profits.

"It's interesting because you wonder almost if the family being refused as a donor for art museums played a role in this settlement," Alexander said. "In all these cases, there are so many factors that can play a role."

Oklahoma's 2017 lawsuit in large part mirrored the one Wyoming filed last year, claiming Purdue undertook a litany of practices to both ensure doctors viewed the company's opioid medication as safe to prescribe and to increase the amount of OxyContin Wyoming doctors gave out to patients.

Purdue invested heavily to counter doctors' resistance to using opioid medicine. Through multiple on-site visits by sales representatives, paying doctors seven figures to extol the virtues of OxyContin and secretly financially backing multiple pain advocacy groups to push for expanded opioid prescriptions, Purdue was able to push OxyContin sales nationally from $48 million in 1996 to more than $1 billion by 2000, according to the Wyoming lawsuit.

Wyoming has paid millions in dealing with opioid addiction in the state. The state's lawsuit claims Wyoming paid $2.29 million in additional Medicaid claims to treat opioid-related addiction from 2008-17.