In early 2001, officials of the state employee health plan in West Virginia noticed a surge in deaths attributed to oxycodone, the active ingredient in the painkiller OxyContin. They quickly decided that OxyContin prescriptions would require prior authorization. But Purdue Pharma, the manufacturer of OxyContin, thwarted the state’s plan by paying a pharmacy benefits manager (PBM) to prevent insurers from limiting prescriptions of the drug, according to a new investigation by STAT.
The financial arrangement between Purdue and Merck Medco came to light in West Virginia court records unsealed by a state judge at the request of STAT.
The strategy to pay Merck Medco extended to other big PBMs and to many other states, according to a former Purdue official responsible for ensuring favorable treatment for OxyContin. The payments were in the form of “rebates” paid by Purdue to the companies. In return, the PBMs agreed to make the drug available without prior authorization and with low copayments.
It is common for drug companies to pay rebates to gain preferential treatment from companies hired by insurance plans to manage prescription drug benefits, STAT said, but in this case the arrangement removed a key safeguard in the system that may have slowed the growth of OxyContin as it became a national bestseller that eventually peaked with annual sales of $3 billion.
Merck Medco was purchased by Express Scripts in 2012.
The West Virginia court records reveal that several state health and insurance officials were early to spot the growing threat of OxyContin addiction and moved to blunt its impact, but their intentions were no match for Purdue Pharma and its PBM allies, STAT reported.
The court documents make clear that blocking any limits on OxyContin prescribing was a top priority for Purdue. In a memo listing the 2001 goals of Purdue’s West Virginia sales team, the first listed item under Medicaid is “Stop any preauthorization efforts for OxyContin.” In a separate memo, Purdue officials reported meeting with a state official to “interrupt” any efforts to require prior authorization of OxyContin.
The case with Purdue was settled in 2004 when the company paid $10 million to West Virginia. Portions of the case file, including documents about marketing of the drug and Purdue’s attempts to prevent limits on prescribing, remained sealed until STAT filed a motion in May to open the records.
Source: STAT; October 26, 2016.