MILLIONS SOLD, OFFICE BY OFFICE

Strategy targeted busy doctors, hit Kentucky

When the small, family-owned company that invented OxyContin unspooled a
sales strategy for its little morphine-like pills in the late 1990s, a
bull's-eye landed on Eastern Kentucky.

Purdue Pharma bought the usual medical journal ads, mailed out fliers and
stocked up on promotional giveaways, such as scratch pads and coffee mugs.

But it spent far more on a technique commonly associated with bigger firms
and less-regulated drugs: one-on-one selling to select doctors.

Between 1996 and 2001, as OxyContin became the nation's top-selling
narcotic, Purdue invested more than $500 million deploying a small army of
sales representatives around the country, according to previously
confidential corporate records.

It offered the reps some of the best paychecks in the business. And it gave
them sophisticated intelligence about doctors' prescribing practices,
according to documents from a little-noticed Ohio lawsuit and a closed
investigation by the Florida attorney general.

Purdue used the prescribing data to help it break into a rich market: family
doctors who were the busiest prescribers of competing pain pills for
everything from backaches to car-crash injuries.

That targeting made Appalachia fertile territory for Purdue's salesmen. The
region had a long history of heavy painkiller use. In 1998, for example,
parts of southwestern Virginia, Eastern Kentucky and West Virginia received
more of OxyContin's competing painkillers per capita than anywhere else in
the nation, federal data show.

Purdue's strategy worked. In 2000, national OxyContin sales exceeded $1
billion, earning the industry's coveted "blockbuster" status. In Kentucky,
that translated to 9.7 million pills.

But illegal users soon tapped that vast reservoir of pills with deadly
consequences, especially in rural America. By 2001, OxyContin was known as
"Hillbilly Heroin," coveted by Appalachian junkies.

And Purdue was fighting allegations that its sales and promotion were to
blame.

The way Purdue Pharma officials see it, OxyContin's phenomenal growth had
more to do with widespread untreated pain than with hard-charging
salesmanship.

"You can't sell a billion dollars of anything if you aren't meeting a need,"
said Robin Hogen, Purdue's vice president for public affairs.

Claims of overly aggressive selling are groundless, he said. No one has ever
accused the company of criminal activity or collected a dime by suing.
Unlike others, the company doesn't buy doctors lavish dinners or sports
tickets. Nor does it advertise to consumers.

"Other than that, we go to market the way most companies do," he said.

That's the problem, say some critics. OxyContin isn't an allergy medicine or
a cholesterol reducer; it's a narcotic in the category that federal
regulators reserve for drugs with the highest potential for abuse.

Purdue should have stressed limited use "rather than encouraging and
targeting some physicians to use OxyContin aggressively," said Dr. Robert
Anthenelli, a University of Cincinnati medical school associate professor,
in an affidavit filed in a lawsuit in Butler County, Ohio, Common Pleas
Court.

Purdue used more "hype" in its pitches than other pain-pill makers have,
according to Dr. William Pratt, a family physician for 30 years in London.
His local OxyContin representative is "a nice guy," he said, but "his job is
to sell, sell."

Pratt said he was annoyed by what he thought were biased speakers at early
pain-treatment meetings Purdue sponsored for doctors. Purdue's Hogen said
the company doesn't tell speakers what to say and wouldn't support
misleading presentations.

The Food and Drug Administration has slapped Purdue twice for medical
journal ads aimed at doctors. One warning said the company overstated the
drug's uses and understated its risks to an "especially egregious and
alarming" extent. Purdue killed the ads.

Cincinnati lawyer Stanley Chesley characterized the promotion of OxyContin
more bluntly at a hearing last February in Butler County: "They copycatted
the drug dealers of America in marketing, but they did it bigger and
better," he said, referring to Purdue and other defendants.

Investing in a painkiller

Well-dressed drug reps -- called "detailers" in the trade -- are fixtures in
doctors' waiting rooms, chatting up receptionists and nurses and angling for
a few precious minutes with the doctor in a hallway or office.

In 1996, Purdue dove into detailing with the kind of commitment usually seen
among far bigger companies. The company launched OxyContin with total sales
and promotion spending of $40 million. By 1998, it had more than doubled
that amount and in 2001 it laid out $267 million.

"They were playing hardball, no doubt about that," said Eric Bolesh, a
senior analyst with Cutting Edge Information, a Durham, N.C., drug industry
consultant.

Purdue was trying to take a far larger slice of the narcotics market than
ever before, company records reveal. Sales of another pain drug it makes, MS
Contin, had reached about $100 million the year before OxyContin came along.
But almost 70 percent of it went to cancer patients, and it would soon face
competition from cheaper generic versions.

OxyContin was aimed at the broad narcotics market, a billion-dollar
business. Surgery, injuries and backaches and arthritis were each bigger
sources of prescriptions than cancer pain.

To reach this new market, the company would spend heavily on its sales
people.

Critics have claimed that OxyContin promotional gimmicks and ads in medical
journals were excessive, but Purdue actually spent less freely than many
drug makers on such things.

Also, federal law prohibited free samples to doctors, and Purdue refrained
from advertising OxyContin on television or in magazines and newspapers --
two big costs for most drug firms.

Instead, the company pumped most of its sales and promotion spending into
its field reps, described in strategy documents as "our most valuable
resource." It also hired industry giant Abbott Laboratories to promote the
drug to doctors in hospitals and other institutions. In 2001, Purdue spent
$149 million on its field reps; Abbott was paid more than $90 million.

Initial plans called for 350 Purdue reps to focus on thousands of doctors'
offices across the country. Abbott put an additional 300 to work contacting
specialists.

Today, it's not clear how many Abbott reps are selling OxyContin, but
Purdue's in-house sales force has more than doubled to 750, said Hogen, the
spokesman. The Kentucky force also more than doubled, from three to seven.

Big drug companies spend about $150,000 per detailer in pay and other costs,
Bolesh's group calculates. In 2001, Purdue spent nearly $200,000 a head, its
records indicate. Even eight years ago, as it launched OxyContin, the
company budgeted $135,000 per sales rep.

"You're looking at big boys' rates," Bolesh said of Purdue's 1995 plans.
"They were really taking a gamble on this."

Doing their homework

"When an OxyContin salesman walks in the door, he knows more about my
prescribing than I do," said Dr. Art Van Zee, a critic of the drug from St.
Charles, Va., just over the Kentucky border from Harlan County.

Purdue records filed in Ohio show that it armed reps with weekly and monthly
data on specific pain drugs that the doctors in their territories were
prescribing. Purdue bought the information from a specialized research
company, which in turn buys most of it from pharmacies.

Purdue gave reps computer data ranking pain-drug prescribers on a scale of
one to 10, tallying the brands and dosages they wrote and even showing how
patients paid.

Such prescribing information "must be used to target the highest potential
physicians," a Purdue marketer urged in a 1995 proposal.

But prescription information wasn't the only advantage OxyContin detailers
brought to their sales meetings. They knew far more about their drug's
effects than most primary-care doctors, who often aren't abreast of new
treatments.

By 2001, that gap troubled Asa Hutchinson, then director of the federal Drug
Enforcement Administration.

With family doctors, especially in rural areas, "you wouldn't have the same
level of expertise in pain management as you would with the pain-management
specialists," he told a congressional hearing investigating OxyContin abuse
in 2001. "It's the sales presentation that is the greatest concern."

The company describes the main role of its detailers as teaching doctors to
use the painkiller properly, officials say.

"There seems to be a misunderstanding about our contacts with doctors and
pharmacists, which we view primarily as an educational responsibility," Paul
Goldenheim, Purdue's executive vice president, told the committee after
Hutchinson spoke.

But newly opened records raise a question about how well all reps stuck to
that mission.

Questionable material

According to notes from a Florida attorney general's investigation, William
Gergely, a former Purdue district manager, said the company gave him two
kinds of training materials when the drug was introduced. Some were "just
for his information and education" and hadn't been submitted to the federal
Food and Drug Administration, and others had. A Florida newspaper has quoted
Gergely as saying that he used unapproved material in sales pitches.

Hogen, of Purdue, called Gergely a disgruntled former employee and said that
if he used unapproved materials, he violated the company's instructions.

Gergely, who managed eight to 10 reps in West Virginia and western
Pennsylvania before leaving the company in 2000, didn't return telephone
calls to his Pennsylvania home.

Records produced in both Florida and Ohio also make clear that Purdue
expected to capitalize on a perception that OxyContin, made of a chemical
called oxycodone, was less powerful than its predecessor, MS Contin, which
is made of morphine.

Several documents cite "the negative stigma of morphine," which is still
seen by many physicians in its Civil War-era context as the last-gasp
painkiller of dying soldiers. At the same time, the papers note that many
doctors feel comfortable with existing pain pills that include oxycodone as
an ingredient.

Yet a 1999 Purdue-sponsored study entered in the Ohio case concluded that
oxycodone is nearly twice as potent as an equal amount of morphine.

Purdue said in response that the relative strengths of the drugs don't
matter because physicians adjust doses according to the drug used.

Rewards of sales

Successful OxyContin sales people were well rewarded. Gergely, the former
West Virginia manager, made $238,000 in his last year with Purdue, according
to the Florida notes.

Records from Florida and Ohio indicate that some field reps made about
$150,000 a year -- two-thirds of that in sales-based bonuses. Generally,
drug detailers' bonuses range from 10 percent to 50 percent of their total
compensation, according to drug industry research.

In a letter to the Florida attorney general's office, Purdue said that a
2000 industry study of 63 pharmaceutical companies showed that Purdue's pay
structures for sales reps were similar to the rest of the industry.

By 2001, Purdue's sales managers were recognizing another reality.

They pulled 160 reps into the home office from 100 counties with serious
abuse problems and gave them a new mission: Talk to doctors only about
preventing abuse. Fifteen of the 100 counties were in Kentucky.

Sales reps in those areas still include the message in their sales
presentations, the company said.

Marketers also proposed spending $3 million the next year on promotions for
doctors about controlling abuse.

A mid-2001 document delivered important news to the sales force: Purdue
would stop paying its reps bonus money on sales generated by doctors
arrested for improper prescribing.

It warned it might do the same on business from physicians under
investigation, who had lost their federal drug licenses or who had
suspicious prescribing patterns.

To date, Purdue has stopped paying bonuses to reps on prescriptions written
by 214 doctors -- five in Kentucky.

And reps were told one more thing: It would be their job to report any such
doctors to Purdue's management.