OxyContin Maker Settles with Insurer

June 15, 2006

Purdue Pharma has settled a civil lawsuit with its insurer over costs stemming from hundreds of lawsuits involving the painkiller OxyContin, company officials said.

Steadfast Insurance Co., a unit of Zurich Insurance Co. of Switzerland, had sued Stamford-based drug maker Purdue Pharma in 2001 over the legal costs. The companies confirmed a confidential settlement had been reached, but would not discuss details.

“It has been settled. There will be no trial,” said Tim Bannon, an attorney for Purdue Pharma.

Purdue Pharma has resolved more than 400 lawsuits in its favor, but still has 1,380 lawsuits pending in state and federal courts around the country related to OxyContin, Bannon said.

In the lawsuit, Steadfast and Purdue officials disputed who had the right to hire the attorneys. Steadfast objected to fees paid to attorneys hired without its consent.

OxyContin was initially hailed as a breakthrough in the treatment of severe chronic pain when it was introduced in 1996. Abuse of the drug, however, has become a problem in recent years after users discovered that crushing the time-release tablets and snorting or injecting the powder yields an immediate, heroin-like high.

Purdue Pharma, a privately held company, has been sued for its marketing of OxyContin.

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