Dec 17 2019
Washington – Senator Dianne Feinstein (D-Calif.) joined Senator Tammy Baldwin (D-Wis.) and nine of their colleagues in sending a letter to Purdue Pharma’s Board of Directors, calling on them to cancel the reported $1.3 million bonus they are planning to give to Purdue Pharma CEO Craig Landau. Attorneys general from 24 states have argued that Landau should not collect a bonus, and on Thursday, a bankruptcy judge is expected to issue a decision on whether the CEO can collect it.
The senators write, “We write to you today with concerns about the $1.3 million incentive bonus payment you have proposed to make to Purdue chief executive officer Craig Landau while your company is in Chapter 11 bankruptcy. Mr. Landau is a named defendant in multiple lawsuits, which allege he personally designed Purdue’s intentionally deceptive opioid marketing campaign. Further, the payment is based on aggressive performance incentives similar to those used to encourage opioid sales. As such, we ask that you cancel the incentive payment to Mr. Landau and reevaluate your incentive payment plan to ensure your company puts patient safety ahead of profits.”
Purdue’s opioid marketing campaign accelerated an opioid epidemic that has claimed an estimated 400,000 lives. The campaign generated $35 billion in revenue for Purdue and likely significant incentive bonus compensation for Mr. Landau for achieving ambitious opioid sales targets. The senators are concerned that Purdue is using profits from selling more prescription opioids to reward high-level employees with massive bonuses, rather than helping states ravished by the opioid crisis that the company made worse.
The senators continue, “By maintaining the aggressive incentive plan for Mr. Landau, the Board is showing that it does not recognize the role the incentive program played in accelerating the opioid crisis into a national tragedy. While the filings indicate that Purdue’s sales incentive plan will not pay bonuses for opioid sales, it is not clear that the operating profit incentive will exclude opioid sales from its calculation.”
The company’s recently-submitted compensation proposal would incentivize Mr. Landau to meet aggressive sales targets, and could result in the unwarranted prescription and irresponsible distribution of opioids and other addictive drugs. While the proposal indicates that Purdue’s sales incentive plan will not pay bonuses for opioid sales, it is not clear that the operating profit incentive will exclude opioid sales from its calculation. In their letter, the senators highlight that there is no indication the very compensation policies that encouraged its employees to allegedly deceive doctors and patients to sell opioids have been removed from the current compensation plan to sell other drugs.
They conclude, “In closing, we again urge you to cancel your proposed incentive bonus payment to Mr. Landau, and reevaluate your entire incentive pay program to ensure that your company puts patient safety ahead of profits.”
The full letter is available here.