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Democratic Senators urge judge to reject Purdue Pharma’s proposal to pay CEO a bonus

Published on 22/09/20 at 12:13pm
Photo by Psiĥedelisto

Democratic US Senators are urging Judge Robert D. Drain to reject Purdue Pharma’s proposal to pay CEO and President Craig Landau a bonus of up to $3.5 million. 

This is being led by Senators Tammy Baldwin, Joe Manchin, Maggie Hassan, Tina Smith and Richard Blumenthal. 

They co-signed a letter that stated: “While we agree that appropriate compensation is a necessary feature of sustainable business practices, no business should seek to reward any employee that has engaged in criminal practices. Executives in leadership roles must be held accountable for their actions. 

“This proposed incentive structure represents an affront to the thousands of families that have been harmed by the opioid crisis, and an entirely inappropriate exercise given the impact of Purdue’s continued recklessness. Since 2017, while Mr. Landau was reportedly ‘leading’ the company, Purdue has engaged in a number of potentially criminal activities, with the aim of further promoting the company’s opioid products.”

Landau has served as the President and CEO at Purdue since 2017, and the company has said he wasn’t directly involved in the intentionally deceptive marketing campaign that contributed to the opioid crisis. In the compensation package offered, Purdue Executives would collectively get $9.87 million and Landau could receive an award of up to $3.52 million. 

The Senators' problem with Landau hinges on actions the company took in regards to its opioids from the Summer of 2016 to the Spring of 2019. Purdue paid an electronic health records company to create an alert that would prompt doctors to take action that would increase prescriptions for Purdue’s extended release opioid products that included Butrans, Hysingla and OxyContin. This alert was pushed on medical providers 230 million times over the time period.

Also, between 2015 and 2018, Purdue provided kickbacks to specialty pharmacies to fill OxyContin prescriptions that were rejected by traditional pharmacies. Purdue would refer patients and prescribers to these specialty pharmacies to have their prescriptions filled, and the company would pay $40 per prescription to call the patient and send them a pre-printed marketing pamphlet. This amounted to the company paying $137,000 for this arrangement with the pharmacies filing over $2 million in Medicare prescriptions for Purdue opioids over the same time period. 

Finally, the Senators cite Purdue paying doctors serving as corporate advisors and speakers in an effort to promote opioid prescriptions from 2010 through to 2018. Marketing personnel from Purdue would select doctors to retain, and paid corporate advisors and speakers to induce them to prescribe opioids and reward them for prescribing the company’s drugs. Over a five-year time period, the company paid $3 million for advisers and $10 million in speaking fees, in violation of the federal anti-kickback statute. 

The letter concludes: “To provide Mr. Landau with this bonus is to endorse the very behavior for which Mr. Landau has been sued by multiple states. These states allege that Mr. Landau is “one of the chief architects and beneficiaries of Purdue’s illegal marketing campaign.” The investigation of Mr. Landau, and the associated litigation, have only been suspended in an effort to adjudicate this bankruptcy.”

So far, 122,000 individuals have filed personal injury claims associated with opioid products made by Purdue.

Conor Kavanagh

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