After Fueling Opioid Crisis, Sacklers to Remain Billionaires

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  • Source: UncoverDC
  • 09/19/2023

On Wednesday, after destroying nearly half a million lives, OxyContin maker Purdue Pharma's strategy to settle thousands of opioid lawsuits was approved by U.S. Bankruptcy Judge Robert Drain. The decision awarded the Sackler family, who made billions upon billions on Purdue Pharma, sweeping immunity from future opioid lawsuits and allowed them to maintain and conceivably increase their estimated $11 billion fortune. The settlement denies the thousands of plaintiffs—whose lawsuits total a staggering $40 trillion—their day in court, also does not require the Sacklers to admit wrongdoing.

Despite years of inquiry and litigation alleging they urged Purdue to "aggressively and inappropriately" market OxyContin, the Sackler family successfully avoided most attempts to force them to answer questions about their management of Purdue or the multi-billion-dollar fortune they accumulated as OxyContin became a bestselling pain medicine. Between 2008 and 2017, the Sackler family transferred nearly $10.7b out of Purdue Pharma and $1.3 billion between 1995 and 2007. Purdue sold $31 billion worth of OxyContin between 1996 and 2016. in 2017, with over one hundred people per day dying, President Trump declared the opioid crisis a national emergency.

Mission to Mislead About OxyContin

The pharma giant's decades-long misleading marketing ploy got underway in May 1997, a year after Purdue Pharma launched OxyContin, when Michael Friedman, the company's head of sales and marketing, solicited input on a critical decision from Dr. Richard Sackler, a member of the billionaire family. Friedman revealed to Sackler that he didn't want to "correct the false impression among doctors that OxyContin was weaker than morphine because the myth was boosting prescriptions — and sales," and Sackler agreed. Friedman explained to Sackler:

"It would be extremely dangerous at this early stage in the life of the product to make physicians think the drug is stronger or equal to morphine. … We are well aware of the view held by many physicians that oxycodone [the active ingredient in OxyContin] is weaker than morphine. I do not plan to do anything about that."

In 2007, ten years after Friedman and Sackler's agreement to misrepresent OxyContin, Purdue pleaded guilty in federal court to understating the risk of addiction to the drug, including neglecting to alert doctors that it was a more potent painkiller than morphine. The company agreed to pay $600 million in fines and penalties. Still, distributions to the Sackler family increased significantly after Purdue's plea deal with the Justice Department

The email exchanges between Friedman and Richard Sackler surrounding the 2007 federal court case were divulged in sealed court documents, including a 2015 deposition of Richard Sackler obtained by ProPublica in late 2019. The August 28, 2015 deposition, taken as part of a lawsuit by the state of Kentucky against Purdue, is believed to be the only time a Sackler family member has been questioned under oath about the unlawful marketing of OxyContin and what the family knew about it.

Much of the questioning of Sackler in the 337-page deposition centered on Purdue's marketing of OxyContin. Following the release of the revealing deposition's contents—which Purdue fought for three years to keep secret, along with hundreds of other documents—Purdue issued a statement in support of Richard Sackler's testimony, but admitted it had made a "determination to avoid emphasizing OxyContin as a powerful cancer pain drug," out of "a concern that non-cancer patients would be reluctant to take a cancer drug."

Purdue Pharma Takes The Fall

In October 2020, after "years of work by the FBI and its partner to combat the opioid crisis in the U.S.," the Justice Department announced a global resolution of its civil and criminal investigations into Purdue Pharma and a civil resolution of its civil investigation into individual shareholders from the Sackler family. As part of the agreement, the resolutions with Purdue were subject to the bankruptcy court's approval.

In the agreement, Purdue Pharma agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the most significant penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture.

After the DOJ's announcement of a settlement with Purdue, Rep. Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, and Committee Member Rep. Mark DeSaulnier released documents obtained by the Committee as part of its investigation into Purdue Pharma and members of the Sackler family, who have owned a controlling share of Purdue since 1952. Upon releasing the documents, Maloney and DeSaulnier stated:

“The documents we are releasing today show that members of the Sackler family—and in particular Dr. Richard Sackler—recklessly pushed Purdue executives to flood the market with OxyContin to maximize their personal wealth, even after the company reached a settlement with DOJ in 2007 for misleading marketing. We are disappointed that DOJ forfeited yet another opportunity to hold members of the Sackler family fully accountable for their role in fueling the devastating opioid epidemic.”

On November 24, 2020, Purdue Pharma pleaded guilty to fraud and kickback conspiracies. As part of the guilty plea, Purdue admitted that from May 2007 through at least March 2017, it conspired to defraud the United States by impeding the lawful function of the Drug Enforcement Administration (DEA). Purdue also admitted that it made payments to two doctors between June 2009 and March 2017 through its doctor speaker program to persuade those doctors to write more prescriptions of the company's opioid products. Also, from April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging to order Purdue's extended-release opioid products—OxyContin, Butrans, and Hysingla.

The Sackler Deal, and Will it Hold?

According to CDC data now archived, abuse of opioids cost the U.S. $78.5 billion in 2013. If the agreement holds up, funds guaranteed by the Sacklers don't come close to covering that cost. As part of the plan, the Sacklers—who themselves are not the subject of the bankruptcy proceedings involving Purdue Pharma, but some family members are named alongside the company in the civil lawsuits—have agreed to contribute nearly $4.5 billion, sell their pharmaceutical holdings, and surrender their equity in Purdue. In exchange, they will receive lifetime immunity from civil liability over their role in the opioid crisis.

The highlight of the deal is a plan to dissolve Purdue and reestablish it as a public benefit corporation. The new business will continue to sell some of Purdue's namesake products (including opioid painkillers, opioid substitution therapies like buprenorphine, and anti-overdose medications like naloxone) and use the profits of these sales to subsidize addiction treatment and prevention programs. Meanwhile, the Sackler family, whose name has been removed from a long list of buildings, will remain one of the wealthiest families in the world.

Introducing a platform for an appeal, the branch of the Justice Department that oversees bankruptcy court has vehemently opposed the settlement, which Judge Drain's landmark ruling would have to succeed to become final. Additionally, at least two states and Washington D.C. are preparing appeals over the bankruptcy plan. When addressing objections to the settlement, Drain, who said an appeal would be costly and would hurt communities in need of opioid relief by diverting money to legal fees rather than policing and treatment budgets, stated:

"One cannot put a price on a human life or an injury such as opioid addiction. And yet, that's what courts do with respect to personal injuries. The amount that courts reach is rarely, in terms of dollars, sufficient compensation. That is particularly the case where the wrongdoer is insolvent."

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