Purdue Pharma, the company that planted the seeds of the opioid epidemic through its aggressive marketing of OxyContin, has long claimed it was unaware of the powerful opioid painkiller's growing abuse until years after it went on the market.
But a copy of a confidential Justice Department report shows that federal prosecutors investigating the company found that Purdue Pharma knew about "significant" abuse of OxyContin in the first years after the drug's introduction in 1996 and concealed that information.
Company officials had received reports that the pills were being crushed and snorted; stolen from pharmacies; and that some doctors were being charged with selling prescriptions, according to dozens of previously undisclosed documents that offer a detailed look inside Purdue Pharma. But the drug maker continued "in the face of this knowledge" to market OxyContin as less prone to abuse and addiction than other prescription opioids, prosecutors wrote in 2006.
Based on their findings after a four-year investigation, the prosecutors recommended that three top Purdue Pharma executives be indicted on felony charges, including conspiracy to defraud the United States, that could have sent the men to prison if convicted.
But top Justice Department officials in the George W. Bush administration did not support the move, said four lawyers who took part in those discussions or were briefed about them. Instead, the government settled the case in 2007.
Prosecutors found that the company's sales representatives used the words "street value," "crush," or "snort" in 117 internal notes recording their visits to doctors or other medical professionals from 1997 through 1999.
The 120-page report also cited emails showing that Purdue Pharma's owners, members of the wealthy Sackler family, were sent reports about abuse of OxyContin and another company opioid, MS Contin.
"We have in fact picked up references to abuse of our opioid products on the internet," Purdue Pharma's general counsel, Howard R. Udell, wrote in early 1999 to another company official. That same year, prosecutors said, company officials learned of a call to a pharmacy describing "OxyContin as the hottest thing on the street — forget Vicodin."
Mr. Udell and other company executives testified in Congress and elsewhere that the drug maker did not learn about OxyContin's growing abuse until early 2000, when the United States attorney in Maine issued an alert. Today, Purdue Pharma, which is based in Stamford, Conn., maintains that position.
The episode remains relevant as lawmakers and regulators struggle to stem a mounting epidemic that involves both prescription opioids and, increasingly, illegal opioid compounds like heroin and counterfeit forms of fentanyl. President Trump has declared the problem a public health emergency.
Over the past two decades, more than 200,000 people have died in the United States from overdoses involving prescription opioids. States and cities continue to file a wave of lawsuits against Purdue Pharma and other opioid manufacturers and distributors.
A spokesman for Purdue Pharma, Robert Josephson, declined to comment on the allegations in the report but said the company was involved in efforts to address opioid abuse.
"Suggesting that activities that last occurred more than 16 years ago are responsible for today's complex and multifaceted opioid crisis is deeply flawed," he said in a statement.
In 2007, Purdue Pharma pleaded guilty to a felony charge of "misbranding" OxyContin while marketing the drug by misrepresenting, among other things, its risk of addiction and potential to be abused. Three executives — the company's chief executive, Michael Friedman; its top medical officer, Dr. Paul D. Goldenheim; and Mr. Udell, who died in 2013 — each pleaded guilty to a misdemeanor "misbranding" charge that solely held them liable as Purdue Pharma's "responsible" executives and did not accuse them of wrongdoing. The company and the executives paid a combined $634.5 million in fines and the men were required to perform community service.
The head of the Justice Department's criminal division at the time, Alice S. Fisher, did not respond to emails seeking comment about the decision not to pursue indictments. That decision followed meetings with a Purdue Pharma defense team whose advisers included Rudolph W. Giuliani, a onetime United States attorney and former New York mayor. Mr. Giuliani, who was then regarded as a potential Republican presidential candidate, is now a legal adviser to Mr. Trump.
The Justice Department hailed the settlement as a victory. But several former government officials said the decision not to bring more serious charges and air the evidence prosecutors had gathered meant that a critical chance to slow the trajectory of the opioid epidemic was lost.
"It would have been a turning point," said Terrance Woodworth, a former Drug Enforcement Administration official who investigated Purdue Pharma in the early 2000s. "It would have sent a message to the entire drug industry."
Prosecutors did not accuse any Sackler family members of wrongdoing. But they wrote that Richard Sackler was told in 1999 while he was president of Purdue Pharma about discussions in internet chat rooms where drug abusers described snorting OxyContin, which contains oxycodone, a powerful narcotic. Other family members, including Raymond and Mortimer Sackler, the drug maker's founders, were sent reports about the abuse of OxyContin's predecessor drug, a long-acting form of morphine sold as MS Contin, the report said.
A spokesman for Sackler family members involved with the company, Linden Zakula, declined to comment. Richard Sackler, who is now a director of Purdue Pharma, also declined to comment.
The three executives, who prosecutors described as reporting directly to the Sacklers, have always asserted they had done nothing wrong and had moved quickly to address the drug's growing abuse after they became aware of it in 2000.
"Everyone was taken by surprise by what happened," Dr. Goldenheim testified in 2001. "We launched OxyContin in 1996, and for the first four years on the market, we did not hear of any particular problem."