Senators urge bankruptcy judge to block Purdue Pharma CEO's $3.5 million bonus

Four U.S. senators wrote a letter to U.S. Bankruptcy Judge Robert Drain Sept. 21, in which they urged him to prevent Purdue Pharma from paying its CEO a $3.5 million bonus.

The drugmaker filed for bankruptcy in September 2019 to resolve thousands of lawsuits accusing it of fueling the opioid epidemic, primarily by flooding communities with its highly addictive narcotic OxyContin. Purdue spent $134 million on lawyers and advisers during its first nine months of bankruptcy, but the abundant legal spending has not lessened its litigation burden, as state officials and local authorities have rejected the drugmaker's settlement offers.

Mr. Drain decided earlier this year that Purdue's bonus for Craig Landau was appropriate, as it would entice him to stay at the company and hold the position he has served in since June 2017. 

In their letter, Sens. Tammy Baldwin, D-Wis., Maggie Hassan, D-N.H., Joe Manchin, D-W.Va., and Tina Smith, D-Minn., argue that giving Mr. Landau such a bonus "is to endorse the very behavior for which Mr. Landau has been sued by multiple states."

The letter accuses Mr. Landau of being a key player in three major programs run by Purdue. The senators allege he participated in a scheme in which the drugmaker paid EHR company Practice Fusion to issue alerts telling physicians to take actions that would increase opioid prescriptions. About 230 million alerts were sent to physicians during that time, the letter states.

The senators went on to accuse Mr. Landau of assisting in Purdue's plan to refer prescribers and patients to specialty pharmacies, to which the drugmaker paid about $40 per prescription to promote its opioids to patients by sending them pre-printed marketing materials. They also allege he was involved in a scheme that violated federal kickback laws by paying physicians to speak on behalf of increased opioid prescriptions and act as corporate advisers.

The letter also notes that more than 122,000 people have filed personal injury claims related to Purdue opioids.

"Instead of preserving cash to maximize the amount available to these struggling families, Purdue wants to spend millions to ensure their executives stay motivated enough to simply continue doing their jobs," the senators wrote. "Bonus payments as outlined in Purdue's proposal should not be made while these families continue to wait for justice."

A Purdue spokesperson responded to the letter, saying Mr. Landau "has led the company and delivered results for its many stakeholders, keeping the company competitive and profitable in order to maximize value for claimants and the American public," according to STAT.

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