The opioid wash cycle: Pharma cos., gov't repeat a lethal dance
When drugmakers overstep, expect a fat civil settlement. No boss goes to prison and investors pay the brunt of it. Then - rinse, repeat! - it happens again.
Pennsylvania Attorney General Josh Shapiro and his counterparts in 40 states said last week that it's time to look at corporate America's role in painkiller abuse. About 13 Pennsylvanians died from drug overdoses each day last year, up from nine a day in 2015. That's more than twice as many as died from road wrecks and guns combined. Most of these victims, he pointed out, started on powerful, legally prescribed pain pills — theirs, or someone else's — made and marketed by big American drugmakers.
So what are they going to do about it? Shapiro said the AGs are probing eight large drugmakers and sellers, including four big area employers: Endo Pharmaceuticals with U.S. headquarters in Malvern, AmerisourceBergen of Chesterbrook, N.J.-based Johnson & Johnson's Janssen division, and Teva's Malvern-based Cephalon unit. He promised "action" of some kind "if the law was broken."
What happens next will seem familiar if recent crusades against tobacco moguls, drugmakers, and mortgage financiers are any measure: If the firms market drugs beyond their intended uses, causing harm, the government lawyers will push for civil cash settlements, and people who weren't in the room when bad decisions were made — shareholders — will pay a big chunk. Departed bosses won't face criminal charges. Firms will say they have changed their ways while planning to launch similar products. And then — rinse, repeat — the pattern happens again.
Endo has been through a version of this cycle before:
In 1950 the company rolled out Percodan, a pill version of opium-based oxycodone, with aspirin. In 1959 Endo started selling the opiate Numorphan — a.k.a. oxymorphone — including suppositories for "moderate to severe pain" for operating-room patients, such as pregnant women in labor.
Percodan fast became popular, not just for those facing surgery, but for less specific pains and anxiety. In 1963, the California Attorney General's Office blamed Percodan for the state's growing drug-addiction problem. Elvis Presley and death-cult leader Jim Jones were later among its reported abusers. In 1970, Percodan's main ingredient was listed under the new federal Controlled Substances Act under Schedule II, with "high potential for abuse," making it tougher to prescribe.
That year the owners sold Endo to the nation's top chemical maker, DuPont Co., which had big plans for pain drugs, and hoped to develop addiction treatments. Endo soon won FDA approval for Percocet, which is oxycodone with acetaminophen, the pain-killer in Tylenol. Like Percodan, Percocet was popular and attracted abuse.
Endo's Numorphan, euphoric and highly addictive, became a popular heroin alternative for abusers, who called the pills "blues." The National Institute on Drug Abuse named Numorphan a "widely abused" drug in 1974. In 1982, DuPont took Numorphan instant-release pills off the market, citing "commercial reasons." According to an FDA history, the company acted following "anecdotal reports of abuse by injection."
By 1994, DuPont and Merck reorganized Endo Laboratories LLC to expand sales of Percocet and other painkillers. Endo chief Carol Ammon told DuPont bosses the pain business would grow faster separated from the chemical giant. She and her lieutenants raised $227 million on Wall Street and spun the company off in 1997. The FDA soon approved Percocet in a wider range of doses; Endo wrapped the pills in new teal labels; Percocet sales quintupled to over $200 million in 2003.
Endo also asked the FDA to allow it to start selling oxymorphone again. Instead of Numorphan, it would be marketed as Opana, with the pill version Opana ER (for Extended Release). Purdue Pharmaceuticals, developer of the popular and often-abused rival OxyContin, sued to block what it said was a too-similar product.
In 2005, Ammon retired from Endo after collecting more than $200 million from sales of Endo stock options.
In 2006, Endo settled with Purdue and won FDA approval for Opana. Ammon's successor, David Lankau, touted the born-again drug as Endo's first internally developed pharmaceutical and called it a better choice than morphine (or its own Percocet) for many patients with low-back, arthritis, or cancer pain. (Asked for comment, Ammon had Endo issue a statement that she has been out of the company for years and had no comment. Lankau didn't respond to messages left at his consultancy.)
Endo hired 220 new salespeople to push Opana ER and targeted 67,000 U.S. doctors, and not just pain specialists. Lankau told investors the new salespeople would have to visit nonspecialists "four, five, or six" times to get them to prescribe Opana. The doctors weren't made to take special training, though Endo warned the drugs were subject to abuse.
Sales took off: from $20 million in 2007 to a peak of $384 million — 15 percent of Endo's total sales — in 2013. The company used profits to add new products. Endo shares peaked in 2015 at $95. The firm was briefly worth over $20 billion.
Then Opana crashed, and so did Endo. Starting in 2014, Opana sales fell sharply each year. Endo stock has fallen to around $8.50 a share, leaving a market value of $1.9 billion, less than 10 percent of its peak.
What went wrong? For one thing, like old Numorphan, Opana was popular with addicts, who broke up the slow-release pills for a fast high. "Opana is the big thing right now in pharmaceutical drug abuse," the DEA's Philadelphia intelligence office reported in May 2011, adding that the "blues" that Endo made back in hippie times had reappeared in Delaware, Philadelphia, and New York and were fast replacing OxyContin as abusers' favored heroin alternative. Philadelphia reported its first four Opana deaths in early 2011. The New York attorney general sued and collected $200,000 from Endo in 2016 as a penalty for not emphasizing Opana's addictive properties.
Endo reformulated Opana ER into a "no-crush" version. It asked the FDA to certify the new Opana as harder to abuse than old Opana, which would also make it tougher for generic firms to make cheaper versions. The FDA declined. Opana went to the new version anyway, in 2012.
According to later FDA reports, drug abusers told them the new Opana ER was harder to powder and snort, but easier to process for needle injection. One user survey found that nearly 30 percent of Opana users were abusing the drug in 2015, almost twice the rate of OxyContin or Fentanyl.
Abusers, after dissolving the pills with solvents, stayed high by shooting up multiple times and sharing needles. Opana ER was associated with a blood-infection cluster in Tennessee and an HIV outbreak in Indiana (abuse of the original Opana had been associated with a hepatitis C outbreak in New York).
Endo explained falling Opana sales to investors by blaming generic competitors, "supply disruption" at a pill plant, and tighter FDA opioid guidelines, which started depressing painkiller sales in general.
Federal prosecutors across the U.S. have sued doctors for prescribing Opana in excess of safety guidelines. In 2015, Endo said it was cooperating with opioid-abuse investigators from Chicago and New York state, and federal prosecutors in Philadelphia. Missouri and other states and counties hard hit by opioid addiction have since sued Endo, saying the company failed to take steps to keep the drug from abusers. Investors allege Endo failed to warn of the "inherent risk of abuse" in its reformulated Opana ER, in a suit brought by Los Angeles lawyer Brian Lundin last week.
In March, FDA urged Endo to stop selling Opana ER. Endo said it was "disappointed," but agreed, effective Sept. 1. Endo also laid off 375 salespeople whose products included Opana and other pain brands.
Spokeswoman Heather Zoumas Lubeski declined to discuss Endo's history or current litigation. She said CEO Paul Campanelli and his team have "a new strategic vision" focused less on pain and more on generic and disease-specific drugs.
Noting that the FDA cited "unintended" abuse of Opana ER, she said Endo still believes in the "safety, efficacy and favorable risk benefit of that product when used as intended."