A Case Study in Corporate Malfeasance and Regulatory Capture

Fraudulent Scientific Foundation and Deceptive Marketing

The industry's claims about opioid safety rested on a dangerously flimsy scientific foundation that companies knew to be inadequate for supporting widespread chronic pain treatment (Van Zee, 2009).

Pharmaceutical companies, particularly Purdue, based their assertions that "patients won't become addicted if they take the drug for pain" largely on a single 1980 letter to the editor in the New England Journal of Medicine (NPR, 2017).

This 101-word letter by Porter and Jick examined only hospitalized patients receiving small doses of opioids under medical supervision and found addiction in just four cases out of nearly 12,000 patients (NPR, 2017).

However, pharmaceutical companies grossly misrepresented this research, applying its findings to long-term outpatient chronic pain treatment---a completely different clinical scenario (NPR, 2017).

The original author, Dr. Hershel Jick, later expressed profound regret, stating: "If I knew then what I know now, I would never have published it. It wasn't worth it" (NPR, 2017).

The opioid crisis that has devastated American communities represents one of the most egregious examples of corporate misconduct in modern history, with pharmaceutical companies systematically prioritizing profits over human lives through deceptive marketing campaigns and fraudulent claims (Van Zee, 2009).

Purdue Pharma, maker of OxyContin, launched an unprecedented marketing blitz beginning in 1996 that fundamentally transformed how physicians approached pain management (Van Zee, 2009).

The company conducted more than 40 national pain-management conferences at luxury resorts in Florida, Arizona, and California between 1996 and 2001, training over 5,000 physicians, pharmacists, and nurses who were then recruited for Purdue's speaker bureau (Van Zee, 2009).

These all-expenses-paid symposiums represented a systematic effort to influence medical practice through financial incentives rather than evidence-based medicine (Van Zee, 2009).

Systematic Bribery and Kickback Schemes

Pharmaceutical companies engaged in elaborate bribery schemes that corrupted the medical profession and directly contributed to overprescribing (NPR, 2019).

Companies like Insys Therapeutics orchestrated nationwide kickback programs, paying doctors millions of dollars through fraudulent "speaker programs" that were actually designed to increase prescriptions rather than provide legitimate education (NPR, 2019).

John Kapoor, founder of Insys, was sentenced to five and a half years in prison after being found guilty of racketeering conspiracy for orchestrating a scheme that paid doctors over $130,000 in bribes to prescribe the company's fentanyl-based medication Subsys (Associated Press, 2020).

Research demonstrates a clear correlation between pharmaceutical payments and prescribing behavior: doctors who received more than $25,000 from opioid manufacturers were significantly more likely to prescribe high volumes of opioids (CNN, 2018).

The top 1% of opioid prescribers received four times more money from manufacturers than median prescribers, while the top 0.1% earned nine times as much (CNN, 2018).

Some physicians received over $1 million in payments over just two years, raising serious questions about whether medical decisions were being driven by financial incentives rather than patient welfare (ProPublica, 2019).

Market Manipulation and Covert Advocacy

Pharmaceutical companies systematically manipulated public policy and medical standards through covertly funded patient advocacy groups and professional organizations (HSGAC Senate Report, 2018).

Five major opioid manufacturers contributed nearly $9 million to 14 patient advocacy organizations and professional societies between 2012 and 2017 (HSGAC Senate Report, 2018).

Purdue Pharma alone provided $4.15 million to advocacy groups during this period, making it the largest single contributor (NPR, 2018).

These ostensibly independent organizations then promoted messages favorable to increased opioid use, including minimizing addiction risks, criticizing government prescribing guidelines, and lobbying against laws aimed at curbing opioid abuse (HSGAC Senate Report, 2018).

The American Pain Foundation, which described itself as the nation's largest pain patient organization, received 90 percent of its $5 million in funding in 2010 from the pharmaceutical and medical device industry before dissolving in 2012 when its industry ties were exposed (ProPublica, 2012).

Companies also influenced medical standards by promoting the concept of "pain as the fifth vital sign," which was championed by the American Pain Society in 1995 and subsequently adopted by the Veterans Health Administration and Joint Commission (Cleveland Clinic Journal of Medicine, 2016).

This campaign, supported by pharmaceutical funding, led to mandatory pain screening and contributed to dramatic increases in opioid prescribing (National Academies Perspectives, 2017).

Regulatory Capture and Systemic Failure

The opioid crisis also represents a profound failure of regulatory oversight, with pharmaceutical companies successfully capturing key institutions that should have protected public health (Journal of Ethics, 2020).

Companies funded medical education, influenced prescribing guidelines, and even worked directly with FDA officials to secure favorable drug approvals despite inadequate safety data (Journal of Ethics, 2020).

The FDA approved extended-release oxycodone based on only a single two-week clinical trial in osteoarthritis patients, far short of the rigorous testing typically required for drugs intended for chronic use (Journal of Ethics, 2020).

This regulatory failure enabled companies to market opioids for conditions and durations of use for which safety and efficacy had never been established (Journal of Ethics, 2020).

The opioid crisis represents not just corporate misconduct, but systematic regulatory capture that enabled pharmaceutical companies to essentially write their own rules at the expense of public health.

The most detailed example of regulatory capture in the opioid crisis involves Dr. Curtis Wright IV, the FDA medical reviewer who approved OxyContin in 1995 and then left to work for Purdue Pharma (Kapoor & Dhingra, 2019).

• Initial Positioning (1993): Wright, as FDA medical reviewer, initially told Purdue that the FDA felt OxyContin was not appropriate for osteoarthritis patients and would not approve a protocol to test effectiveness in osteoarthritis (Kapoor & Dhingra, 2019).

• The Workaround (1993): Wright suggested Purdue could overcome FDA objections by rewriting their protocol to state that osteoarthritis patients were being used as "pain models," not as target patients (Kapoor & Dhingra, 2019).

• Approval Decision (1995): Wright approved OxyContin based on only a single two-week clinical trial in osteoarthritis patients, far short of the rigorous testing typically required for drugs intended for chronic use (Tanne, 2020; Kapoor & Dhingra, 2019).

• The Revolving Door (Post-1995): Wright left the FDA and was hired by Purdue Pharma as Executive Director in Risk Assessment Coordination for New Products (Angelico, 2020; Kapoor & Dhingra, 2019).

• Continued Advocacy (2003): Even eight years later, Wright was still testifying on behalf of Purdue that addiction to OxyContin was "rare," basing his opinion on the same flawed Porter-Jick letter that had been discredited (Kapoor & Dhingra, 2019).

Wright left the FDA in October 1997 and, after about a year, accepted a position at Purdue Pharma as Executive Director in Risk Assessment Coordination for New Products (Kapoor & Dhingra, 2019).

In sworn testimony, Wright stated his FDA salary had been roughly $140,000--$158,000, and that his initial Purdue salary was about $185,000, rising to roughly $200,000 by 2003 (Kapoor & Dhingra, 2019).

A Department of Justice summary of a prosecution memo reported that Purdue's records showed Wright's starting compensation package "in excess of $379,000," which aligns with reporting that his first-year package was about $400,000 (Ogrosky, 2006; Keefe, 2021).

The capture wasn't necessarily officials being deceived, but rather a systematic process of industry influence:

• Financial Dependence: Since 1992, the FDA has been partially funded by user fees paid by pharmaceutical companies, creating a situation where "the FDA treats companies like partners or customers" rather than entities to be regulated (Association of Health Care Journalists, 2025).

• Information Asymmetry: Pharmaceutical companies control the data about their products, and the FDA can only review what companies provide. Companies like Purdue withheld negative data while emphasizing favorable studies (Kapoor & Dhingra, 2019).

• Career Incentives: FDA reviewers knew they could potentially earn much higher salaries in private industry, creating implicit pressure to maintain good relationships with companies (Association of Health Care Journalists, 2025; Revolving Door Research, 2016).

• In Pharmaceuticals: Research found that 57% of FDA reviewers who left the agency between 2001-2010 went to work for the pharmaceutical industry they had previously regulated. About 27% of all reviewers during this period left to work for industry (Revolving Door Research, 2016).

• Across Healthcare: A 2023 study found that 32% of all Department of Health and Human Services appointees left for private industry jobs, with the highest rates at CDC (54% exit rate), Centers for Medicare and Medicaid Services (over 50%), and FDA (Dorfman et al., 2023; Lupkin & Good, 2023).

• Government-Wide: The pharmaceutical industry ranks 14th among all industries for employing former government officials, with 55.62% of pharmaceutical lobbyists being "revolvers" (former government employees) (OpenSecrets, 2025).

• Current Crisis: As of 2025, an estimated 600 FDA drug reviewers have recused themselves from approval processes because they're interviewing with pharmaceutical companies (Florko, 2025).

Victim Blaming and Moral Bankruptcy

When confronted with mounting evidence of the harm their products were causing, pharmaceutical executives engaged in victim blaming that revealed a profound moral corruption (CBS News, 2019).

Richard Sackler, former Purdue president and member of the family controlling the company, wrote in a 2001 email: "Abusers aren't victims; they are the victimizers" (CBS News, 2019).

Internal documents revealed that the Sackler family referred to people addicted to their products as "culprits," "reckless criminals," and "scum of the earth" (Minnesota Attorney General, 2019).

This pattern of blaming patients for addiction problems that the companies had systematically created through deceptive marketing represents what one expert characterized as "institutional corruption of pharmaceuticals" (Light, 2021).

Limited Criminal Prosecutions

John Kapoor (Insys Therapeutics): The highest-ranking pharmaceutical executive prosecuted, sentenced to 5.5 years in prison in 2020 for racketeering conspiracy, paying doctors bribes to prescribe opioids. He is currently serving his sentence at a federal prison in Minnesota (Associated Press, 2020; Huang, 2020; Frontline, 2021).

Other Insys Executives: Six other executives received prison sentences ranging from 1-33 months, including CEO Michael Babich and sales chief Alec Burlakoff (Huang, 2020; FDA Criminal Investigations, 2019).

Sackler Family: Despite their central role, no Sackler family members have been charged criminally. Purdue Pharma pleaded guilty twice to criminal charges and paid over $600 million in fines, but the Sacklers themselves have only faced civil lawsuits (Bebinger, 2022; Kamp, 2022).

Limited Scope: These prosecutions represent only a tiny fraction of the executives responsible for the crisis, with most avoiding criminal accountability (Bebinger, 2022).

To your reform questions: there are indeed criminal statutes that can apply to executives who knowingly harm the public, such as wire/mail fraud, conspiracy, racketeering (RICO), and misbranding; the Insys prosecutions demonstrate that criminal liability for executives is possible under existing law (Huang, 2020; FDA OCI, 2019).

Regarding bankruptcy and personal financial liability, U.S. bankruptcy law can discharge many civil liabilities, but certain debts---such as those arising from fraud, willful and malicious injury, or specific statutory exceptions---are not dischargeable; however, without explicit findings or settlements structured to avoid discharge, some liabilities can be limited or reshaped in bankruptcy (CBO, 2022).

On internal company documents, firms can be compelled to disclose internal materials through civil discovery, regulatory subpoenas, and criminal process; the call for "mandatory disclosure" refers to routine, proactive transparency (e.g., publishing internal studies and communications as a matter of course), which is not generally required absent litigation or regulatory action (Georgetown Law, 2023).

Devastating Human and Economic Toll

The consequences of this corporate misconduct have been catastrophic, creating what experts describe as "one of the most devastating public health catastrophes of our time" (Journal of Ethics, 2020).

More than 500,000 Americans died from opioid overdoses between 1999 and 2020, with prescription opioids serving as the gateway that led many to heroin and fentanyl (CDC/NCBI, 2017).

The economic cost of the opioid epidemic reached $1.02 trillion in 2017 alone, representing 3.5% of the nation's GDP (Council of Economic Advisers, 2019).

This translates to nearly $1.9 billion in costs every day, or $21,700 every second (Council of Economic Advisers, 2019).

Despite generating approximately $35 billion in revenue from OxyContin alone, Purdue and the Sackler family extracted over $10 billion from the company while leaving communities to bear the massive costs of addiction treatment, law enforcement, and social services (U.S. House Oversight, 2020).

Conclusion and Recommended Reforms

The opioid crisis stands as a damning indictment of what occurs when corporations are allowed to prioritize profits over human welfare without adequate oversight or accountability (Journal of Ethics, 2020).

The pharmaceutical industry's role in this crisis involved systematic fraud, bribery, manipulation of scientific evidence, and corruption of medical practice on an unprecedented scale (Van Zee, 2009).

As one federal judge concluded, this represents "a man-made plague, 20 years in the making" that could have been prevented had companies chosen ethics over profits (Journal of Ethics, 2020).

The ongoing human suffering caused by this corporate misconduct---including hundreds of thousands of deaths, millions of addictions, and families torn apart---demands not only financial compensation but fundamental reforms to prevent similar tragedies in the future (Council of Economic Advisers, 2019).

Regulatory Independence:

• End pharmaceutical industry funding of FDA through user fees

• Establish independent consumer advocacy offices within regulatory agencies

• Impose "cooling off" periods preventing regulators from immediately joining industry

(Association of Health Care Journalists, 2025; Yablon, 2023; Number Analytics, 2025)

Transparency Measures:

• Mandatory disclosure of all industry payments to government officials

• Public databases tracking regulatory decisions and their outcomes

• Required publication of all clinical trial data, not just favorable results

(Number Analytics, 2025; Yablon, 2023; Wu, 2020)

Structural Changes:

• Term limits for regulatory positions to reduce long-term industry influence

• Independent oversight bodies to audit regulatory agencies

• Tripartite representation including public interest groups in regulatory decisions

(Number Analytics, 2025; Yablon, 2023)

Accountability Mechanisms:

• Criminal liability for executives who knowingly harm public health

• Personal financial liability that cannot be discharged through bankruptcy

• Mandatory disclosure of internal company documents in public health cases

(Wu, 2020)

References

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