RUDY'S ROLE WITH DRUG FIRM RAISES QUESTIONS

On Oct. 23, 2003, Rudy Giuliani appeared with Rep. Curt Weldon in
suburban Upper Darby, Pa., to announce a new program -- called "Dime
Out a Dealer" -- that was designed to combat the growing scourge of
prescription drug abuse by offering $1,500 rewards to anyone who
turned in a pusher.

"Congressman Weldon's new program helps us go after the real villains
here, the illegal dealer," Giuliani said, praising both Weldon
(R-Pa.) and Purdue Pharma, the Stamford, Conn., drugmaker that was
underwriting the program, according to a news release. "By doing so,
we ensure that the patients who require these same life-saving and
enhancing medicines are not denied access based upon the illegal
conduct of others."

The appearance was one in a series of efforts Giuliani undertook over
a five-year period after leaving City Hall in 2002 -- from
image-building and security-consulting to behind-the-scenes lawyering
- -- that helped Purdue grapple with the fallout from widespread abuse
of its blockbuster painkiller, OxyContin, by focusing attention on
street criminals rather than corporate misconduct and lax regulation.

In May, however, the company and three top executives agreed to pay a
$640-million fine and plead guilty to fraudulently marketing the drug
between 1995 and 2001 by minimizing its addictive potential. Federal
prosecutors said scores had died and many more became addicted, and
with Giuliani now running for president, the plea deal he helped
negotiate has drawn new attention from some OxyContin critics who say
he provided a "smoke screen" that deflected attention from the
over-marketing and under-regulation they blame for the crisis.

"The country was being devastated, continues to be devastated, and
his function was to convince the public that there wasn't a problem
with the drug," said Marianne Skolek, a New Jersey nurse whose
daughter Jill died in 2002 of heart failure after she was prescribed
OxyContin for a herniated disc. " ... He is not a hero to the
thousands of parents who have lost kids or whose kids are in rehab
facilities as a result of Purdue peddling this drug."

"If he became president, I would like to move to Canada," said Ed
Bisch, whose teenage son died in Philadelphia in 2001 after mixing
illicit OxyContin with alcohol. "I'll do everything in my meager
power to stop his election."

Purdue declined to respond to these criticisms, except to say that it
was "pleased" with Giuliani's services. Giuliani declined to be
interviewed, but in the past has portrayed himself as devoted to
ensuring that suffering patients didn't lose access to valuable pain
medication because of problems of abuse and illegal trafficking. "You
can't throw out the baby with the bathwater," he said in a speech in
Kansas City, Mo., last year.

Those views, an aide said Friday, are not the result of being
retained by Purdue. "Mr. Giuliani's opinions about pain medicines are
informed and his very own," said spokeswoman Sunny Mindel. Purdue,
Giuliani's consulting firm and his law firm all declined to specify his fees.

It is not clear whether the OxyContin critics will become as vocal
and visible as other Giuliani adversaries, such as New York City
firefighters who regularly spar with him over his Sept. 11 record.
But with OxyContin still a widely abused drug, and a hearing set for
Friday on Purdue's plea deal in federal court in Virginia expected to
attract another round of attention, Giuliani's work for the drug
company seems to hold more political peril than most of his
private-sector activity.

While some political experts said he had nothing to worry about
because he wasn't involved in Purdue's lawbreaking, others said his
role could be a fat target for opponents.

"This is one of Giuliani's Achilles' heels," said Baruch College
public affairs professor Doug Muzzio. "He was directly and intimately
involved with a company that was in violation of law and morals and
ethics. There are ways to frame the issue that resonate, that Rudy
Giuliani is sacrificing the public weal for his own personal benefit."

Packed A Powerful Punch

OxyContin first hit the market in 1995 to meet a perceived need for
more effective pain relievers. An opium-based analgesic in a
time-release formulation, it packed an unusually powerful punch and
was heavily marketed by Purdue both to those who suffered from
chronic and intense cancer pain and to patients with less severe ailments.

It had become a huge moneymaker -- $1.3 billion in sales, $392
million in profit in 2001 -- but also faced a Drug Enforcement
Administration investigation, calls for tighter FDA regulation, and
media and congressional scrutiny of abuse and overprescribing when
Purdue hired Giuliani Partners, the ex-mayor's newly minted
consulting firm, in January 2002.

Part of the assignment was to help design a security plan for
Purdue's plants, to prevent thefts of OxyContin that were under a DEA
microscope, and to advise on other steps that might help stop illicit
diversion. But one Purdue official later admitted, according to
published reports, that Giuliani also was hired in part as a
"political consultant" -- a characterization Purdue now disputes.
Early on, he used his clout to arrange meetings with DEA chief Asa
Hutchinson to discuss the plant security probe, which eventually led
to a $2-million civil fine for recordkeeping violations.

"I felt they were not doing everything they could do. In my opinion
they hired Rudy to give them a good image, and to get around me,"
said Laura Nagel, the chief DEA diversion investigator at the time.
"Rudy got them access to higher levels of government." But she says
Hutchinson never interfered.

The criminal conduct the firm admitted to in May involved sales
efforts in 2001 and earlier -- prior to Giuliani's hiring -- to
falsely convince doctors that Oxy.Contin was less addictive than
other painkillers. The government alleges in civil filings, however,
that fraudulent marketing practices actually continued until 2005,
three years after Giuliani's hiring. Purdue did not admit to that as
part of the plea bargain. Prosecutors have declined to provide details.

A federal investigation began in 2003. Giuliani's role as a defense
lawyer did not become publicly known until May of this year and it is
not clear when it began, but government and defense sources have
confirmed that he played a key role last fall in negotiating the
"agreement in principle" that led to May's plea.

While the plea deal has sparked opposition among some OxyContin
critics who view it as too lenient, few blame Giuliani for his legal
work. Instead, it is public relations efforts -- like the
Philadelphia-area news conference -- that rankle some, especially
focusing blame on street criminals as the "real villains" instead of
on a company that has now admitted that it behaved criminally.

Dr. Art van Zee, who has testified at FDA hearings on OxyContin and
still sees dozens of painkiller addicts at his clinic in rural St.
Charles, Va., compares Purdue's support for programs like "Dime Out a
Dealer" to "using a squirt gun" to try to put out a forest fire while
simultaneously "dropping napalm" through its marketing efforts.
"Everyone is entitled to legal representation, but that is a little
different than being a public advocate for a group," van Zee said.
"You don't know what Giuliani knew or understood about Purdue's role,
but he should have found out before he not only represented but
advocated for them."

Part Of A Bigger Fight

The OxyContin debate has been part of a larger fight in which patient
advocacy groups that are worried about historic undertreatment of
pain have joined with drug companies to argue against regulatory and
law enforcement restrictions on painkillers that might unduly
restrict their availability.

And they have largely succeeded, with the FDA resisting calls from
the DEA and others to restrict prescribing authority to trained pain
specialists and to limit OxyContin to severe, cancer-related distress
instead of allowing it for "moderate" pain from any cause.

Giuliani was a key ally in that debate. He cast himself as an expert
because of his prosecutorial background and his experience with
prostate cancer. As part of his work for Purdue, he agreed to chair a
group called the Rx Action Alliance, which promoted a "balanced"
approach that would address abuse but maintain access for patients --
and, as a by-product, sales for Purdue.

With a Web site that featured Giuliani's picture, the idea behind the
group was to try to bring together people with divergent vantage
points. In practice, pharmaceutical companies and groups concerned
with pain management were particularly well-represented. Few of those
involved could point to concrete accomplishments aside from
networking and e-mail alerts about new research or conferences.

One abuse-oriented group listed as a participant in early meetings
was the Partnership for a Drug Free America. "Nothing ever came of
it," said Josie Feliz, the group's spokeswoman. "Rx Alliance
basically said there is a problem, and something should be done, but
nothing concrete was ever done."

The Alliance did, however, provide a platform for Giuliani to spread
the message of "balance." Typically, he would blame dealers, street
criminals, international smugglers, scamming patients, Internet
pharmacies and bad doctors for the epidemic of painkiller abuse, but
rarely if ever mentioned even the possibility of excessive corporate
marketing or under.-regulation.

"Purdue produces one of the most effective pain management medicines
in history, which helps millions of people around the world,"
Giuliani said in a 2005 interview with the conservative Washington
Legal Foundation. " ... A balanced approach to the problem is
necessary in order to both prevent drug abuse and continue to provide
appropriate and effective care to the millions of patients... "

In that same interview, just a year before negotiating a plea deal in
which Purdue agreed to pay $130 million to settle suits brought by
thousands of OxyContin victims, he warned that lawsuits could create
"unfounded fears" in patients and "stifle the creativity" of
drugmakers. (Despite the settlement, a Giuliani aide noted last week,
Purdue still denies liability.)

And in April 2006, in a speech at the Center for Practical Bioethics
in Kansas City, he warned of a "climate of fear" that might dissuade
doctors from prescribing painkillers, and linked that issue to
questions of patient choice on experimental treatments.

"My great concern with the FDA," he added, "has always been not that
they're not careful enough about medicines, but that they're too careful."

To groups concerned about preserving patients' access to pain
medication, Giuliani's advocacy of "balance" was beyond reproach.

"That's a term that has been used for quite a bit of time in the pain
community and it's been endorsed by the DEA for a long period of time
dating back to 2001," said Matt Bromley, a spokesman for the Alliance
of State Pain Initiatives, who headed Rx Action's communications
committee. "... You're assuming we don't want any regulations, but we
want to ensure the regulations are balanced. The mayor has expressed
the need for that, but that doesn't mean no more regulations."

But for advocates of tougher regulation, it was Purdue's "mantra"
coming out of the mouth of a national hero. "I always wondered
whether the company's priority was that balance, or to push as much
OxyContin out the door as they could before their patent ran out," Nagel said.

Some Unclear Of His Role

And some Rx Action participants say that they didn't realize until
recently that Giuliani was actually a Purdue defense lawyer. Bonnie
Wilford, a Washington-area health consultant recruited to coordinate
Rx Alliance information-sharing who Giuliani Partners identified as
the "executive director," said the group avoided issues of regulation
and marketing so it wouldn't be divisive, but Giuliani's ties could
make its motives appear questionable.

"Many of us did not understand the depth of his involvement with
Purdue," said Wilford, who also worries his candidacy could
politicize the group. "At this point I would like to see him hand
off. It makes me uncomfortable." Giuliani Partners said last week
that his affiliation with Purdue was well known, and it had not heard
such criticism directly.

In the years after Giuliani began working for Purdue and helping it
cope with controversy, OxyContin sales continued to be healthy --
rising from $1.3 billion in 2001 to $1.4 billion in 2002 and $1.97
billion in 2003, before the emergence of generic alternatives began a
drop to $1.6 billion in 2004 and $1.1 billion in 2005.

At the same time, OxyContin itself has continued to be a problem. It
is still listed as a big contributor to prescription drug abuse among
the young, according to recent federal surveys. Congressmen from
Kentucky and Virginia, citing continuing abuse in their districts,
have asked the FDA to revisit OxyContin in the wake of the plea deal
but have so far been rebuffed.

Fair or not, that history has caused some to transfer their anger at
Purdue to Giuliani. Karen Engle directs Operation Unite, a federally
funded law enforcement program to combat prescription drug abuse in
29 eastern Kentucky counties. She says OxyContin continues to be
overprescribed for such problems as dental pain and blames its
continuing abuse on under-regulation.

"They have hired anyone that they can afford, and they have hired the
best," she said. "I'm disappointed in Giuliani, but not surprised. I
just wonder if he's aware of all the families that have lost loved ones."