OxyContin pills. (QMI Agency)
Faced today with the staggering impact of the opioid addictions crisis, Ontario’s Liberal government is urging the federal government to take legal action against a company that allegedly played a role in triggering the epidemic.
But a decade ago, knowledge of lawsuits, criminal charges against executives and the increasing abuse of OxyContin wasn’t enough to dissuade the province from awarding that same company a $4.9-million taxpayer-funded grant.
According to documents obtained by the Toronto Sun in a lengthy battle at Ontario’s Information and Privacy Commission, the Liberal government doled out the money in 2007 to the manufacturer of OxyContin — Purdue Pharma. The documents reveal it did so even though it was well aware of legal issues piling up against the company because of the addictive pills which some experts say are at the root of the country’s wave of opioid addiction.
“Purdue Pharma Canada has been named in three class action lawsuits across Canada over the last year of so, in connection with the OxyContin line of painkillers,” says a briefing note written by government staffers dated November 2008.
It goes on to mention that in 2007, months before the province announced the grant deal, the company settled a $600 million lawsuit settlement in the United States connected to OxyContin. It also says three of the company’s top executives pleaded guilty to misdemeanour fraud charges as part of that settlement.
“The Canadian lawsuits are in very early stages, will take some years to play out, and the outcomes are entirely uncertain,” the note says.
In fact, those lawsuits settled in April 2017 but must still be approved by courts in Quebec and Saskatchewan before they can be finalized. A $20-million settlement would be split amongst as many as 2,000 Canadians who got hooked on OxyContin.
It would also pay $2 million to provincial governments, including Ontario.
The class action suits alleged Purdue knew anyone who took OxyContin risked becoming addicted to the painkiller. The suit further alleged that at no time did the company disclose that risk.
The settlement is not an admission of any liability by Purdue Pharma.
But in 2007, the government knew there was a risk to giving the company the grant under its $150 Biopharmaceutical Investment Program. So, it built provisions into the deal to “protect the taxpayer,” according to the briefing note.
A 50-page contract, also obtained by the Sun, shows the agreement built in “OxyContin Related Provisions” and expressly prohibited Purdue Pharma from using the millions in grant money “directly or indirectly (to) enable or subsidize the manufacture or marketing of OxyContin or...in connection with OxyContin including but not limited to litigation, payment of fines, damages, settlements or legal fees.”
The agreement gave Ontario the right to cancel the deal if anything arising from the OxyContin lawsuits, in the province’s opinion, could affect the company’s ability to fulfil the terms.
Asked about the deal this week, the Ontario government defended awarding the grant.
Polina Osmerkina, spokesman for Economic Development Minister Brad Duguid, said the grant was paid out to the firm to support the construction of a 26,000 square foot expansion of Purdue’s manufacturing facility in Pickering.
“Purdue received the full amount, as Purdue exceeded the job and investment targets set out in the agreement,” she said in a statement to the Sun.
“Ontario’s support of this particular Purdue Pharma project is entirely unrelated — and indeed was explicitly separated from — legal issues involving Purdue and OxyContin,” she added.
OxyContin, a powerful synthetic opioid, was pulled from the market in 2012 and replaced with an abuse-deterrent version of the drug.
The agreement stands in contrast to Ontario Health Minister Eric Hoskins request earlier this month that the federal government take legal action against Purdue Pharma under the Food and Drug Act.
In a letter obtained by the Globe and Mail, Hoskins says the company must be “held accountable” for inappropriate or “potentially illegal” activities surrounding the marketing of OxyContin in Canada.
In a statement to the Sun on Friday, Purdue Pharma said it has “always marketed its products in line with the Health Canada product monograph and in compliance with all applicable rules, regulations and codes, including the Food and Drugs Act.”
The company also said it adhered to the terms of the grant agreement. The company employs 400 workers in Canada, the statement adds.
“As documented in the agreement of 2008, the funds provided were one portion of the total investment made to increase the capacity of our manufacturing and product development operations. We completed the project and complied with the terms of the grant.”
“As stipulated in the agreement, the Government of Ontario’s investment did not include any work related directly or indirectly to OxyContin,” the statement said.
Progressive Conservative economic development critic Monte McNaughton said Ontario tax dollars should never have been handed over to Purdue Pharma, which has made billions in the U.S. and Canada from OxyContin. Asked if the government should have made the deal, even with the protections in the contract, McNaughton is blunt.
“Absolutely not,” he said. “This is a company that is making billions of dollars in the free market system. Taxpayers should not be contributing $5 million to a company that is making billions in profit.”
“I would hate to see a government that would put society at risk by a decision like this,” he added. “I hope that’s not the case. My overall message is there has to be some accountability and 100% transparency when it comes to companies receiving taxpayer money.”
It’s a multi-million dollar contract a drug company didn’t want you to see.
In October 2013, the Toronto Sun made a Freedom of Information request for material surrounding a $4.9 million grant awarded to drug giant Purdue Pharma by the Ontario government. Purdue, maker of the highly-abused drug OxyContin, was to use the money over the five-year agreement to create 60 jobs and expand their manufacturing facility in Pickering.
After appealing to the highest levels at Ontario’s Information and Privacy Commission, an arbitrator ruled in favour of the Sun in 2016. He ordered the release of the contract the Ontario government signed with the drug company, and a briefing note bureaucrats prepared to defend the deal.
For its part, the Ontario government wanted to disclose the information to the Sun, worrying that if it was not released it would lead to a “skewed” understanding of the agreement. The Sun’s lawyers argued the public had a right to know the contents of the agreement.
But the drug company argued that release of the information would harm both it and the Ontario government.
“If sensitive proprietary information contained in the agreement is made public, (Purdue Pharma) stands to suffer serious financial losses which will set back its progress aided by the Program,” the drug company’s lawyers wrote in their submissions to Ontario’s Information and Privacy Commission.
Asked this week why it fought the information’s release, Purdue Pharma said it “adhered to all required timelines in exercising its rights under the Freedom of Information Act to protect specific confidential business information,”
PC economic development critic Monte McNaughton has been pushing the government to release details around every grant it’s given corporations since it came to power in 2004. Thus far, it’s made only some of the agreements public.
“The government seems to be operating under a veil of secrecy,” he said. “Maybe it’s because of circumstances like this.”
McNaughton said any “corporate welfare” agreement should be subject to release.
“My view is that if any company is receiving taxpayer money it should be public,” he said. “All taxpayers should see exactly how they’re contributing to these private companies. I think there should be full transparency.”
“That’s the only way we’re going to bring accountability to the corporate welfare program under the Liberals,” he added.