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WELCH, W.Va. — The warning signs of what would become a deadly opioid epidemic emerged in early 2001. That’s when 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 to do something about it: OxyContin prescriptions would require prior authorization. It was a way to ensure that only people who genuinely needed the painkiller could get it and that people abusing opioids could not.

But an investigation by STAT has found that Purdue Pharma, the manufacturer of OxyContin, thwarted the state’s plan by paying a middleman, known as a pharmacy benefits manager, to prevent insurers from limiting prescriptions of  the drug.

The financial quid pro quo between the painkiller maker and the pharmacy benefits manager, Merck Medco, came to light in West Virginia court records unsealed by a state judge at the request of STAT, and in interviews with people familiar with the arrangement.

“We were screaming at the wall,” said Tom Susman, who headed the state’s public employee insurance agency in the early 2000s and led the push to limit OxyContin prescribing in West Virginia.

“We saw it coming,” he said of the opioid epidemic, which today causes 28,000 overdose deaths a year in the United States. “Now to see the aftermath is the most frustrating thing I have ever seen.”

Overprescribing of OxyContin and other opioid painkillers is blamed for helping to plant the seeds for the current opioid crisis. West Virginia has been hit harder than any other state: It suffers the highest per capita drug overdose death rate in the country — more than double the national average. It also has one of the highest rates of painkiller prescribing.

Welch, W. Va
The Southern Highlands Community Mental Health Center in Welch, W.Va., which offers addiction treatment services.

In McDowell County, where the court records from a state lawsuit against Purdue were unsealed, the local sheriff said prescription pill abuse is so rampant that the county plans to file a new lawsuit against painkiller makers.

The strategy to pay Merck Medco extended to other big pharmacy benefit managers 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 pharmacy benefit managers agreed to make the drug available without prior authorization and with low copayments.

“That was a national contract,” Bernadette Katsur, the former Purdue official, who negotiated contracts with pharmacy benefit managers, said in an interview. “We would negotiate a certain rebate percentage for keeping it on a certain tier related to copay or whether it has prior authorization. We like to keep prior authorization off of any drug.”

Katsur said prior authorization programs do little to eliminate inappropriate prescribing by “bad doctors” and usually just create needless paperwork for doctors working in the best interest of patients. She said some doctors simply won’t deal with the hassle of a prior authorization program, resulting in some legitimate patients not getting the medication they need.

“You don’t want to make it harder for a doctor to prescribe when they are doing the right thing,” she said.

It is common for drug companies to pay rebates to gain preferential treatment from companies hired by insurance plans to manage prescription drug benefits, 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 at annual sales of $3 billion.

The former Merck Medco was purchased by Express Scripts in 2012. A spokesman for Express Scripts said no one currently at the company had knowledge of the West Virginia contract. A spokesman for Purdue Pharma said the company had no comment.

Prior authorization programs typically require doctors to get approval from an insurer before they can prescribe the drug to a patient. As part of such programs, insurers will often limit the conditions for which a drug can be used and the length of time the drug can be prescribed.

A study published this month by the Centers for Disease Control and Prevention detailed how a private insurer’s prior authorization plan in Massachusetts reduced the prescribing of opioids by 15 percent.

“We were screaming at the wall.”

Tom Susman, former head of West Virginia's public employee insurance agency

The West Virginia court records reveal an agonizing situation in which several West Virginia health and insurance officials were early to spot the growing threat of OxyContin addiction and moved to blunt its impact. The well-intentioned bureaucrats, however, were no match for Purdue Pharma or its paid allies.

In early 2001, the pharmacy director for the state employee health plan said her office noticed coroners listing oxycodone as the cause of death for some plan members. This occurred as the number of OxyContin prescriptions written for plan members skyrocketed; spending on the drug went from $11,000 in 1996, the first full year it was on the market, to $2 million in 2002. Purdue, aided at the time by its marketing partner Abbott Laboratories, aggressively marketed OxyContin to doctors with the claim, later shown to be false, that the risk of addiction was low. STAT reported last month that the unsealed West Virginia court records showed that an Abbott sales rep won over an orthopedic surgeon with a box of doughnuts and snack cakes arranged to spell OxyContin.

“We felt a need to put some type of management on the prescription because we saw death claim certificates come in with the cause of death of oxycodone,” said plan Pharmacy Director Felice Joseph in a 2004 deposition that was among the unsealed court records. The employee health plan contracted with Merck Medco to manage its pharmacy benefits, and when state officials asked Merck to put in place a plan to limit OxyContin prescribing, “basically they were refused,” she testified.

Purdue Documents
The box containing sealed documents in the state of West Virginia’s case against Purdue Pharma that were made public by a judge at STAT’s request. (Photo: David Armstrong/STAT)

The medical director for the state plan, Dr. Sandra Joseph, told a similar story in her deposition.

“They felt strongly, and they were very, very reluctant or resistant, for whatever reason,” she said of Merck. “They did not want to put any limits or prior authorization criteria on that.”

Merck downplayed concern about OxyContin abuse, Joseph testified, saying the company “referred to other areas where there were not that many prescriptions for OxyContin, it was not that much of a problem.”

The pharmacy director testified that the state initially wanted to limit OxyContin to terminally ill cancer patients only.

“It was because we felt there was a high abuse potential for its inappropriate use for short-term use,” she testified.

She said a Merck official calculated that the company would lose $128,000 in rebate payments if OxyContin prescribing was limited in West Virginia. It was not specified if that was an annual or one-time loss.

The extent of Purdue’s rebate arrangements with Merck and other benefit managers in other states is not detailed in the West Virginia court records.

Katsur, who left Purdue in 2005, said the payment of rebates was part of a strategy to keep insurers from limiting OxyContin prescriptions. She said such arrangements were common in the industry and not unique to Purdue.

In addition to keeping OxyContin from being subject to prior authorization, the rebates paid to pharmacy benefit managers were used to guarantee favorable status for OxyContin on their listings of approved drugs, she said. PBMs commonly place drugs in different tiers on these lists, called formularies. Some tiers are more restrictive and require higher copayments. Purdue wanted OxyContin placed in the least restrictive tier — and succeeded.

The relationship with Merck Medco was so important that Purdue moved Katsur to New Jersey so she could be close to Merck’s national headquarters, she said.

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.

And in a presentation prepared for a 2001 West Virginia district sales meeting, a Purdue official wrote in regard to the state employee insurance plan that the company was “working with Medco (PBM) to try to make parameters less stringent.”

The internal memos and the actions of Merck contradicted claims by Purdue at the time that it was working with the state to curb abuse of OxyContin, lawyers for the state argued in a motion that was unsealed by the West Virginia court.

“Contrary to the picture of helpfulness and cooperation Purdue attempts to paint, Purdue’s employees were actively and secretly trying to prevent West Virginia from imposing any control on the sale of OxyContin,” the state claimed. 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 ward off limits on prescribing, remained sealed until STAT filed a motion in May to open the records.

Nearly two years after the state insurance plan asked Merck to put a prior authorization plan in place for OxyContin, it finally got what it wanted. But the agency succeeded only after it brought in a new company to manage its prescription plan.

Welch, W. Va
Wyoming Street as seen from the steps of the McDowell County Courthouse in Welch, W.Va.

By then, OxyContin and other painkillers had gained a firm grip on West Virginia, especially in McDowell County, where the state brought its lawsuit against Purdue.

In 2001, the county was a proverbial canary in a coal mine when it came to the emerging national opioid crisis. The rate of accidental prescription drug overdose deaths in West Virginia was relatively low at the time — about 6 deaths per 100,000 residents. In McDowell, however, the rate was 38 deaths per 100,000. Since 2001, the death rate in the state has more than tripled to 21 deaths per 100,000 in 2012.

McDowell Sheriff Martin West said lawyers contracted by the county are preparing a new lawsuit against pain-pill makers. He said the county is considered a “third-world country” by state officials doling out funds to fight opioid abuse.

“Listen to the scanner here every night,” he said. “It’s first responders out every night going up and down hollers for an overdose. It’s pitiful what is going on.”

  • Making a mountain out of a molehill. According to CDC there were about 240 million opiate prescriptions written annually. Out of the 50,000 narcotic deaths about half were prescription meds. Let’s divide 25000 by 240,000000 and it comes down to a death rate risk per prescription of 0.001%. Scaring doctors and pharmacies and causing legitimate patients to suffer is like trying to kill a gnat with a sledgehammer.

    • You obviously either work for a pharmaceutical company or just have your head buried in the sand.

  • I have been taken oxytocin for over 20 years for back pain 4 surgeries. With no overdoses.Would be a great advocate for the company. Have years of experience.

  • Lots of good points in the comments. At a minimum, we need to educate our children of the addictive nature of opiates….legal and illegal. Making a decision to abuse opiates results in a very tough life moving forward (at a minimum) and/or death. No one has ever said….”I sure am glad I chose to start using opiates.” If we can educate as to the addictive nature, maybe we can save some lives.

  • A large number of People die of overdose of Tylenol. Will the imbecile government then start ‘prior authorizations’ for this too. All they want is to restrict medications for patients in incapacitating pain.

    • Yes, acetaminophen is more dangerous than people realize, but your argument about “imbecile government” is nonsense. Worse, it’s dangerous.

      “The American Association of Poison Control Centers (AAPCC) shows about 113 people dying each year as a result of overdosing on medicines with acetaminophen. ”

      and …

      “In 2015, more than 15,000 people died from overdoses involving prescription opioids.” – Center for Disease Control and Prevention

  • For those who are interested and concerned about this ‘epidemic’ of overdoses, etc the Washington Post has published a series of articles outlining how the Drug Enforcement Agency has NOT followed up on recommendations from its investigators to get more involved in limiting the prescriptions of these drugs. One wonders how much big pharma is at least influencing, if not controlling, these decisions being made at the upper echelons of agencies charged with protecting public health and safety.

    • You are very very wrong the dea makes it absolutely impossible to fill a oxy prescription that is even if you can somehow get one because Drs are so scared to prescribe them.. So much so that people who legitamately need them are suffering

    • I lay here suffering in SEVERE MISSERABLE CHRONIC PAIN and do every morning and everyday. I have no life, I enjoy nothing. Doctors have told me that the DEA and the State of Ohio siezed recorfs treating them like criminals if they properly give what many of us need. I do not care what anyone says because none of you have a clue what a day, week, month, year of the painful hell that is my life is like. So should I not work, have nothing, enjoy nothing, suffer, see my mother suffer (who cannot be cured) just because pieces of crap called deug addicts abuse stuff? Im so fed up of being treated with such inconsiderate opinions that I care nothing what I say anymore. LIVE MY LIFE YOU INCONSIDERATE A-HOLES. I want my life of enjoyment, fulfillment of working fulltime doing what I enjoy using my massive amount of skills and talents that are going to waste, finish and patent my inventions some of which can help others, have the life the rest of you take for granted and have no clue how SEVERE some of our pain is. Think of your worst pain that you feel you cannot tolerate then think of having it everyday all day for years! Im sick and tired of suffering because of others actions. Stiffer penalties for drug abusers are needed if they repeat offend then. If they keep doing it and you would rather we suffer to protect them from what they are doing then they need locked up in a prison with rehad nurses and programs for a long period. So we dont have to suffer. Let the addicts suffer in prison if you think we need to suffer because of their actions. Many of us follow the rules, do no wrong and just want the terrible suffering to stop! We deserve that! If you think we need to suffer because if addicts actions then lets use your stupid thoughts on everything: drunk drivers = ban alcohol or cars, texting and driving = ban all cell phones or cars, stabbings = ban all sharp objects even kitchen knives, well shit lets just ban phones, cars, planes, trucks, knives, guns, medication, anything that people can die frim cause in some of your dumb opinions you think we need to make those in pain who do no wrong suffer to protect the ones who DO WRONG AND ABUSE DRUGS! Not Suprised at all we have so many idiots in this country though!

  • Quite aside from the fact that Purdue twarted efforts to limit OxyContin prescribing, of which this is just an addendum to a story that should not end with a solvent company or 40-100 empty jail cells. Does it not disturb people, and the companies who hire these ” prescription drug management companies ” that they are outright accepting bribes to design their formulary rather than doing what is in the best interest of the client. If a city hired a firm to purchase vehicles for them at the best value, it would be quite disturbing, if not criminal, to find that they had equipped the city with Pintos just because Ford paid them hundreds of thousands of dollars.

  • [Enable sarcasm mode]
    Yeah, you don’t want to make it harder for the doctor to do what’s best for his patient by burdening him with paperwork and prior authorization busywork when the doctor’s actions are making you money. You only want to do this when they don’t make you money. Got it.
    [disable sarcasm mode]
    If there was any justice in this country, these pharma sociopaths would go to prison for the rest of their lives.

    • Lets use your twisted opinion and lock those who abuse the drugs up for life then. So we dont suffer due to THEIR actions. No I dont think they deserve life just using your dumb point of view. Gosh Im stunned so many people have no heart and think we need to suffer! What they freaking hell did I do wrong to deserve to suffer? ?? Tell me please! And no I don’t want OxyContin which is what I take, Im seeing a doctor in hopes to switch it since for me it would take more oxycintin than what I prefer cause OxyContin does NOT last 12 hours if your pain us severe and nonstop! Its a fact that it has a “half life” so to speak and it tapers drastically to a point you would need stronger or more doses. Purdue does lie about it being 12 hours of relief. Maybe for acute or minor pain but not for severe nonstop pain. That is the only issue here as it should be labeled no more than 8 hour (I cant even get that but there are medications that I would need less of as compared to OxyContin and be able to have a decent and fair life). I was doing better until a doctor closed down then the DEA and State of Ohio put addicts lives above ours. Are We All Not Equally Important?????????????????????

  • Sorry but if you ever have had bone disease this is sometimes all that will help I had to use it hen I had the st 3 of 15 back surgeries have not taken it since and get by with over the counter and an occasional Vicodin and valium you people that bitch have never had pain

  • Sorry, but the opioid epidemic isn’t coming from the legal selling of prescriptions. It’s coming from the demand for drugs from suburbia. People like to pretend their white picket fence towns are perfect and everything is all right. Inside those homes lurk minors that like to party because they’re bored and can easily obtain drugs from the city. If there wasn’t a demand, there wouldn’t be a problem. The parents don’t keep their stash locked away either. The house wife that has nothing to do so she takes benzos and barba all day just to make her believe everything is all right when her husband is cheating on her. Too common of a story. Tragically common. People are weak. That’s besides the point. Anyways, everyone knows the government is in with the narcos coming in and their pockets are being filled happily with money from the ‘burbs. It’s true. I mean just look at LSD and other party drugs. They came from the government. They’re acting like they had no hand in it. The documents are there. The proof is there. So why is nothing being done? DEA is just an administration to clean up the mess they created themselves. And they’re doing a horrible job. Doctors now fear handing an ailing paitent anything above tylenol 3 for pain. Then the patient is neglected. They still suffer. Insurance is suppose to give us the benefit of not allowing that, but even so it’s just a piece of paper. We shouldn’t even need insurance. Doctor prices should be low enough that people can afford it out of pocket. It’s a scam. A huge scam! I’m sorry, but the piece of paper that says they did so many years of learning does nothing. There’s so much misdiagnosing. If it were up to me, I would’t pay ’til I got fixed. Practices aren’t even all consistent. What one doctor does, another does differently or omits. Now we have nurses writing prescription and seeing patients instead of the doctor! No offense to nurses, but that’s not right. I’m paying a premium and out of pocket to see a nurse? Jeez do people have it backwards these days. I’m surprised ignorance doesn’t have it’s own physical atmosphere like smog does.

    • LSD was invented by Sandoz, a Swiss company.

      I agree that the “white picket fences” crowd abuses oxycodone in disproportionate amounts, but a lot of it is prescribed, particularly amongst adults. Even teenagers who abuse it were often prescribed their first doses, then may have later moved to illicit sources. I don’t think anyone who can walk themselves home should be prescribed oxycodone at all, it should be reserved for hospitals and end-of-life care. People can be prescribed opiates like hydrocodone or codiene to take home, which do not have overdose and life-destroying consequences nearly as often as oxycodone.

  • Sorry, just reading about this makes me nauseous, how many lives lost family destroyed. When will it end.

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