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: Virginia Qui Tam Law

How The Mighty Have Fallen: Restrictions Are Upheld for Executives in Purdue Pharma OxyContin Case

By Zachary A. Kitts

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An administrative law judge has upheld a decision barring three former Purdue Pharma executives from participating in federal healthcare programs for 15 years, the Department of Health and Human Services announced last Friday, according to the New York Times.

The three executives are former CEO Michael Friedman, Howard Udell, the company's former top lawyer, and Dr. Paul Goldenheim, who was once the chief medical officer of the company.

In 2007, as part of a civil settlement in the U.S. District Court for the Western District of Virginia, Purdue Pharma paid more than $634 million dollars to settle identical allegations. The investigation, which was led by then-U.S. Attorney John Brownlee, also produced considerable evidence of wrongdoing on the part of these three executives.

In light of the evidence, Brownlee added a unique twist to the case--he obtained criminal indictments against all three executives for their individual roles in Purdue Pharma's wrongdoing. Like most large corporate wrongdoers caught in the act, Purdue Pharma was willing to pay hundreds of millions of dollars, but it didn't want its three top officers to plead guilty to criminal acts.

But Brownlee insisted that all three men plead guilty to criminal acts as part of a global settlement. After much "weeping and wailing and gnashing of teeth," on the part of Messrs Friedman, Udell, and Goldenheim, each pleaded guilty to criminal charges. As a result, each was banned for 15 years from doing business with federal healthcare programs.

Notwithstanding the logistics and the sheer size and complexity of such a prosecution, consider this: Brownlee prosecuted this massive case with one of the smallest U.S. Attorney's offices in the entire country.

Full post as published by Virginia Qui Tam Law on January 27, 2009 (boomark / email).