There can be few more heart wrenching moments than seeing a loved one racked with pain and being desperate to find them relief —except, perhaps, if you are the person in pain yourself.
In the search for something that would help, millions turned to a new drug called OxyContin, which promised relief without the curse of addiction. My mother was one. Yet it soon became apparent that the medication was not quite the miracle its makers purported it to be. By the mid-1990s, press reports began to raise the possibility that the drug was far more addictive than originally claimed. The death toll from the drug’s overuse began to mount. A whole new class of addicts was created. Court records now show that the drug’s maker, Purdue Pharma L.P., repeatedly and willfully ignored those concerns.
This past week, the company pleaded guilty in U.S. federal court to criminal charges in connection with the deceptive claims it made about the drug. Three of its officers, including its CEO, top lawyer and former chief medical officer, pleaded guilty to less serious misdemeanors. Purdue will pay a fine of $470 million and its current and former executives will pay some $35 million. A further $130 million will be set aside to settle civil claims resulting from injuries and deaths. Nobody is going to prison.
Even in the face of warnings from health-care professionals, the media and members of its own sales force . . . Purdue continued to push a fraudulent marketing campaign,” U.S. Attorney John L. Brownlee said in a justice department press release.
Now, here’s a question: Why is Purdue CEO Michael Friedman, one of the three who pleaded guilty to misdemeanor charges involving “misbranding,” still on the job? The answer lies in the difference —too little considered by advocates of private equity— between a publicly traded company and a private corporation. Purdue is in the latter category. Its web site does not even disclose the names of its executive officers. Its sales are not reported. Its board of directors is not easy to identify. It is, in most respects, a closed, secretive and opaque company. It is also a corporate felon. But because it is a private entity, it is much less influenced by public opinion and the résumés of those in control.
Fortunately, my mother saw the troubling reports about this drug early on and insisted that her doctor take her off the medication. Not all patients were as alert as my mother; many had become too addicted to do anything about it. The company knew it was deceiving medical professionals and vulnerable patients. It did so solely to enhance the profit and wealth of its already well-heeled private owners —names, by the way, the public does not get to see. Billions poured into the company from the sale of this drug, according to court papers.
Like many companies, Purdue boasts on its web site that “Honesty, integrity, and respect for the individual are at the core of our culture.” Its conduct makes a mockery of such values and the company should probably be prosecuted for lying about that, as well.
But there is a larger issue at work here, and it involves the actions of the government itself. When corporate heavyweights have engaged in wrongdoing, such as what Martha Stewart did in obstructing justice or Alfred Taubman did in price fixing at Sotheby’s, they were sent to prison. Nobody died or even got sick because of their actions. In contrast, Purdue not only orchestrated a plan of deliberate deception, but when it became aware of the drug’s damage, it turned a blind eye and continued the scam —over and over again.
Companies are eager to write a check when confronted with their misdeeds. Many insiders see it as a cost of doing business. When executives are sent to prison, however, it tends to elicit a different appreciation for the consequences of wrongdoing.
Individual officers and employees at Purdue made the decisions that took the company down this criminal path —their evil transgressions were not forced upon them. Yet everyone connected with this criminal conduct is free today. Ms. Stewart and Mr. Taubman, on the other hand, will be considered ex-felons for the rest of their lives. There is something terribly wrong when fiddling with the price of antiques can send a man to prison and peddling a drug that is branded in deceit and causes enormous pain and suffering does not even result in a jail door opening, which is why the actions of the U.S. Justice Department in failing to demand prison time for those responsible for the criminal actions at Purdue Pharma is our choice for the Outrage of the Week.