Purdue Pharma LP, the company most widely tied to the opioid crisis, is changing how it will sell OxyContin, its most widely recognized painkiller.
The privately held company on Monday, Feb. 12, confirmed earlier reports that it is slashing its sales force by more than half and that the remaining 200 sales representatives will no longer visit physicians pitching opioid painkillers. Instead, the sales reps will push Purdue's nonopioid products, such as Symproic, a drug to treat opioid-induced constipation.
Purdue also is changing its policy of advising doctors on the use of the drug and now will direct prescribers to information and data from the U.S. Surgeon General's office as well as the Centers for Disease Control and Prevention.
The Stamford, Conn., company has been at the center of the drug disaster and has been roundly criticized by politicians, health officials and the press for contributing to the opioid epidemic that last year killed 64,000 in the U.S.
The changes by Purdue represent a sharp departure for the drug company. Purdue has long been regarded as the premier provider of pain medicines, and among the drugs it has sold are OxyContin, hydromorphone and hydrocodone.
In the past, the company has been criticized for aggressively marketing opioids. It sponsored pain management and speaker training conferences where it recruited doctors to become speakers in getting the word out. It also instituted a program with its sales force where high opioid sales were rewarded with commissions that often topped salaries.
Pulling back from calling on doctors regarding sales of prescription opioids, therefore, is a major shift for the drug company. Purdue, like other pharmaceutical makers in the pain management space and opioid sector, has been working harder at promoting its image as a responsible player in battling opioid abuse in recent months.
Purdue has other products beyond opioids that include prescription sleep medication Intermezzo, antiseptics and over-the-counter laxative Senokot. OxyContin, though, has been its cash cow, taking the company from revenue of a few billion in 2007 to a reported $35 billion in 2017. The company downplays its dominance in the opioid market, saying its products account for just 2% of the opioids prescribed in the U.S.
And Purdue is right, it has plenty of company in producing and selling opioids, including companies such as Teva Pharmaceutical Industries Ltd. (TEVA) , Allergan plc (AGN) , Johnson & Johnson Inc. (JNJ) and Endo International plc (ENDP) . But Purdue has been selling OxyContin since 1996, and when opioid drugs are under discussion, they are often referred to as Oxy, in the same way that consumer refer to any tissue product as Kleenex.
Moreover, while all of the companies named above are the subject of lawsuits from state, county and city governments all over the country seeking funds to battle the opioid epidemic as well as changing the way the companies sell and market the drugs, most of the lawsuits are of a recent vintage.
Purdue's lawyers, though, have been kept busy for a while. In 2004, West Virginia sued the company for deceptive marketing and was paid $10 million. The feds got into the act in May 2007, when the company settled over allegations that it had misbranded its drug, and the total payout was $634.5 million. A total of 19 states and the District of Columbia sued Purdue that year, reaping a total of $19.5 million for their trouble. Later that year, Kentucky sued the drugmaker, and in 2015 that action was settled for $24 million.
The recent lawsuits over opioid-based painkillers against drugmakers number in the hundreds. A group of 41 states have joined together to press the pharma companies producing opioid drugs to furnish documents for a possible lawsuit. At least 10 states are suing Purdue separately. Finally, Native American tribes in the Dakotas, Minnesota, Oklahoma and Wisconsin are also bringing lawsuits over the sales of opioids on reservations.
It isn't just drug companies on the business end of legal actions, however; drug distributors are being served as well. McKesson Corp. (MCK) , AmerisourceBergen Corp. (ABC) and Cardinal Health Inc. (CAH) have all been sued over how they have distributed the drugs across the country. The trio constitute the largest drug distributors in the country, but they are not the only distributors or retailers caught up in the crisis. The Cherokee Nation in Oklahoma has brought actions that name Walmart Inc. (WMT) , CVS Health Corp. (CVS) and Walgreens Boots Alliance Inc. (WBA) .
The shift by Purdue from visiting physicians on opioid sales calls is a substantial change for the company, and the announcement about the change shows that Purdue is making changes in how it does business and in how it is presenting itself.
While the company provided information to TheStreet about the changes in its sales tactics, it did not respond to a request for an explanation about why the changes were made and what if any effect the growing number of legal actions against the company had in the decision-making process.
Likewise, it is unknown whether Purdue's shift away from direct sales calls regarding opioids signals any sort of change in how other pharma companies in the opioid market might approach the sale of the painkillers.