By Phillip M. Bailey, Louisville Courier Journal
Tim Robinson is blunt when asked what he thinks of Purdue Pharma — maker of the popular painkiller OxyContin — and its impact on Eastern Kentucky.
“Killers,” he said.
Robinson, a former attorney, founded Addiction Recovery Care with his wife, Leila, to fight the pain-pill crisis.
As a recovering alcoholic, he said he understands the uphill plight of addiction. The center is serving more than 1,100 people across the state from its Louisa-based headquarters.
“When OxyContin came out, it was marketed saying only 2% of people would become addicted,” he said. “It was promoted falsely, and because of that, now we’re in the middle of an opioid crisis.”
Robinson said Purdue Pharma’s bankruptcy filing this week is the center of conversation in the region. The company is looking to restructure after a reported multibillion-dollar agreement with dozens of states and thousands of cities.
Talk of the settlement has also brought renewed questions about Kentucky’s $24 million settlement with the drugmaker four years ago, Robinson said.
Robinson said residents and families hit hardest by addiction want to know from the past three Democratic attorneys general — Greg Stumbo, who is running for the seat this year; Jack Conway; and incumbent Andy Beshear, who is running for governor — about why other states are raking in much larger dollar amounts.
This year, for instance, Oklahoma reached a $270 million settlement with Purdue Pharma to cover its handling of the opioid crisis.
“I remember thinking $24 million was an awfully low amount,” Robinson said. “I mean, look at what Oklahoma got and they haven’t been hit with the crisis we have, and have nowhere near the deaths per capita. Kentucky is ground zero for this thing, and we got short changed.”
When Stumbo brought Purdue Pharma to court more than a decade ago, he proclaimed the case could be worth $1 billion. He told The Courier Journal this week one of his first acts, if reelected to the seat, will be to reexamine the case.
Stumbo also said, unlike his immediate successor Conway, he wouldn’t have settled with the pharmaceutical giant out of court. He said he would have pursued the case to a jury trial.
“I want to finish the mission I started,” Stumbo said. “I’ve seen firsthand what those sons of bitches did to people, including my family. It’s personal and it’s a passion with me.”
But Conway disputes if such a legal strategy would have worked, given the narrow road of the case he inherited. He said whatever a jury would have awarded would have likely been reversed on appeal, and that people are second-guessing the settlement for political reasons.
Stumbo goes further in his criticism of the case’s handling by both of his successors, and lends credibility to an attack being levied by Republican Gov. Matt Bevin, who has raised conflict-of-interest questions surrounding Beshear and Conway.
Beshear, the governor’s office points out, worked for Louisville-based Stites & Harbison, the law firm representing Purdue Pharma against the state, before being elected attorney general in 2015. He has denied any involvement with the lawsuit, but Republican legislators have consistently criticized his actions surrounding the case.
Republicans charge Conway, who had just lost his bid for governor to Bevin, rushed the $24 million settlement to help Beshear, the incoming attorney general, avoid a conflict of interest.
Bevin also has called attention to how $4.2 million of the state’s settlement was paid out to a law firm that Conway later joined as a partner.
“The optics on that don’t look very good,” Stumbo said. “And I think any fair-minded person would look at that and ask, ‘Why did that happen?’
“I’ve never known either of those men to do anything which I thought was improper,” he added. “I have great respect for both of them, but there are questions that legitimately I think could flow out from those set of facts.”
Kentucky among top settlements
Thirty-six states have sued Purdue Pharma and the Sackler family, its owners, in a series of court cases since 2004.
West Virginia, for example, negotiated a $10 million settlement in 2004, paid over a four-year period mostly for drug abuse programs.
The suits against Purdue Pharma often stem from claims based on state or federal consumer protection laws, which allege the popularity of OxyContin, introduced by the company in 1996, was fueled by a misleading marketing campaign.
In a May 2007, for instance, Purdue Pharma executives lost a major federal court case in which they agreed to pay out $600 million in fines and other payments. They also had to admit in court to making false claims about the powerful painkiller.
“Nearly six years and longer ago, some employees made, or told other employees to make, certain statements about OxyContin to some health care professionals that were inconsistent with the FDA-approved prescribing information for OxyContin and the express warnings it contained about risks associated with the medicine,” Purdue Pharma said in a May 2007 statement.
“We accept responsibility for those past misstatements and regret that they were made,” the statement also said.
Michelle Mello, a law professor at Stanford University who has researched opioid cases nationally, said Purdue Pharma was “the major and most culpable player” in terms of making the most potent and addictive drug, coupled with bad business practices.
The trend of large civil settlements, beginning with West Virginia and Kentucky, has increased steadily over the years in large part because prosecutors have learned more about drug-company practices, she said.
“It’s important to remember the evidence and record has evolved a lot since 2015 because of all the discovery that has gone on,” Mello said. “There’s a lot more that is known about these companies’ practices and that just puts the litigation in a very different position.”
Stumbo’s suit against Purdue Pharma arrived right after the federal case and covered the company’s activities from 1996 to 2001. But it did not go after statutory consumer protection violations because Kentucky accepted approximately $500,000 as part of the 2007 federal case in which Purdue pleaded guilty to fraudulently marketing Oxycontin.
The Stumbo administration instead focused its allegations on Purdue Pharma committing Medicaid fraud and creating a public nuisance in its marketing, which has a higher legal threshold.
Conway said his administration got what was a record settlement at the time, and without enough regulatory tools to fully prosecute it.
“I understand politics are being played in 2019,” he said. “I really don’t want to engage in a tit for tat with the Bevin administration, but I do want to say we had a difficult case to prove and I got the most money I could in a difficult situation late in 2015.”
Legal experts who follow opioid cases back up Conway’s point that other states, such as Oklahoma, are receiving larger settlements because they have stronger regulations protecting consumers from drug companies.
Rebecca Haffajee, a former University of Michigan health professor who studied the opioid issue, said what Kentucky received was in line with settlements in those earlier years. She said the state’s $24 million judgment was based on the limited evidence base and overdose statistics available to prosecutors at the time
“The harms in 2007 were different from what they were in 2015 and what they are today,” she said. “They were growing during that whole time. If we think about it from that perspective, it doesn’t seem quite as small. It was along the lines with other states.”
Haffajee, who now works as a policy researcher at the Rand Corp. think tank, said Oklahoma prosecutors should be given credit for their novel use of their public nuisance law, but the comparison with Kentucky isn’t apples to apples.
“In Oklahoma, the public nuisance law is much more favorable,” she said. “It’s more generous and generally framed, and it pulls in more types of things that can be public nuisances, and that was a promising strategy from a claims perspective to get the charges to stick.”
Conway admits part of the reason eyebrows are being raised about the $24 million settlement was the promises he and Stumbo made about what the suit could bring in.
In 2007, Stumbo said the case was worth up to $1 billion, and Conway later said in court records it was worth $100 million.
Republican critics of the case’s handling, especially in Bevin’s office, point to those statements as another example of how Kentuckians were hosed by the Purdue Pharma settlement, but Conway said it is a routine a legal strategy against the plaintiff.
“I readily acknowledge, I was not reticent about trying to create public litigation pressure on Purdue,” he said. “What’s the old saying? ‘If you get everything you asked for, you didn’t get enough?'”
What Beshear won’t answer
A year before Bevin announced he was running for reelection, his office filed a suit aimed at Beshear and Conway to learn more about the circumstances surrounding the settlement.
Specifically, the governor’s office wants to know more about an expired state contract, awarded to the Louisville-based law firm then known as Dolt, Thompson, Shepherd & Kinney.
Conway became a partner at the firm after it received about $4.2 million of the $24 million settlement he negotiated. He has said he was “walled off” from the firm’s involvement and has not profited from the case.
But Bevin has slammed the contract as an example of Democratic corruption, and administration officials told The Courier Journal they’re being denied certain documents and sworn depositions surrounding the Purdue Pharma deal.
Under the deal, Purdue Pharma made an initial payment of $12 million with one-third going to the firm where Conway now works. This is to be followed by eight more annual payments of $1.5 million each.
Blake Brickman, the governor’s chief of staff, said the drug company’s bankruptcy filing could put those funds at risk. He said the settlement Conway allowed and Beshear oversaw paid the attorney first and will be well below the state’s anti-drug programming needs.
“The opioid crisis is one of the biggest issues facing Kentucky,” Brickman said. “The fact that Kentucky only received $24 million instead of close to $300 million like Oklahoma, shows we missed out on hundreds of millions of funding that could go to opioid abuse, prevention and treatment.”
The Beshear campaign bristled at questions about his role in the Purdue Pharma case, and cast Bevin and other Republican official’s comments as spinning a “conspiracy theory” amid a tight race.
“Andy had no role in the settlement and has said that many times,” Sam Newton, a Beshear campaign spokesman, said in an email. “Do you all think the attorney general has been lying? As attorney general, Andy has been very aggressive against opioid companies, while Matt Bevin has formally opposed his lawsuit against Johnson & Johnson.”
Newton emphasized how Beshear has filed nine separate suits against drug companies, and is moving those cases toward trial.
Background: Tentative Purdue Pharma settlement puts spotlight back on Beshear
The Courier Journal asked the Beshear campaign several questions about his role, which remain unanswered.
Beshear’s campaign, for instance, took a pass on questions of whether he ever billed his former law firm for any consultation tied to the Purdue Pharma case; if Kentucky should have recouped more than $24 million; and what document shows Beshear recusing himself as attorney general in regard to the Purdue Pharma case.
“Attorney General Beshear is doing everything in his power to keep the public from knowing the answers to these questions,” Brickman said. “He has fought us time and time again to prevent sunlight on this very issue.”
And a former assistant attorney general, Lainie Kaiser, who worked on the Purdue Pharma suit, has also given Bevin administration officials further reason to be suspicious about the Purdue settlement.
In a sworn deposition, Kaiser, who is suing Beshear’s office for gender discrimination, said the Purdue Pharma case was settled because Conway’s staff was concerned about how it would be handled when Beshear took office.
“I think there was some question since Stites & Harbison was counsel for Purdue Pharma, and the incoming attorney general was a partner at Stites & Harbison, that there would be some conflict once he took office,” she said, according to court records. “There was some discussion of the case getting moved to the governor’s office should Jack Conway win, because he was running for governor.”
Conway said this week that up until voters cast their ballots in his race against Bevin, he was confident he was going to be governor, and believed the case would move with him there after the 2015 election. He said that thought, however, played no role in the settlement decision after the election was over.
“I had no idea what Andy Beshear wanted or didn’t want because I never had the first conversation with Andy about the settlement of this case,” Conway said. “Stites & Harbison and the attorney general’s office were at each other’s throats, so there was no cozy relationship there either.”
Reach Phillip M. Bailey at firstname.lastname@example.org or 502-582-4475. Follow him on Twitter at @phillipmbailey.