The Sackler Family is Trying to Skirt Responsibility for the Opioid Crisis
Earlier this month, OxyContin manufacturer and pharmaceutical giant Purdue Pharma filed for Chapter 11 bankruptcy protection.
How could a billion dollar drugmaker — responsible for one of the most prominent prescription drugs of the 20th century — suddenly decide to undergo a total financial meltdown? It likely has to do with the onslaught of state and federal lawsuits levied against Purdue which cite the giant corporation as a driving force in the American opioid crisis.
At the time of its bankruptcy announcement, the drug magnate faced some 2,300 lawsuits that accused it of being instrumental in the nearly 400,000 opioid-related deaths that have ravaged the nation in the last two decades. At both the municipal and state level, Purdue has faced relentless pressure to repay money profited through an aggressive and deceitful campaign to sell their OxyContin line of products. Many state attorneys general — including North Carolina’s own Josh Stein — are preparing lawsuits against the Sackler family, who own Purdue Pharma and amassed their billion dollar fortune off the sale of OxyContin.
On the surface level, reports of Purdue’s bankruptcy may signal a momentous victory in the fight against Big Pharma and a chance to end its influence on the addiction crisis. However, the Sacklers may escape this reckoning unscathed.
Chapter 11 bankruptcy differs from traditional bankruptcy. Rather than liquidating all of Purdue’s assets, this type of filing reorganizes and restructures the company so that it can settle the myriad lawsuits brought against it. Under the tentative settlement, Purdue would pay around $13 billion to states affected by opioid addiction using profits from future sales of its products. Additionally, the Sackler family would be forced to pay $3 billion to government addiction treatment funds and phase themselves out of Purdue’s ownership group. While the proposed settlement may seem like sufficient punishment, it leaves a lot to be desired from the Sackler family.
If the bankruptcy filing is approved, Purdue Pharma would continue to exist as a for-profit drugmaker, and the Sackler Family would successfully dodge thousands of lawsuits without a single admission of guilt. Although the Sacklers would have to personally pay $3 billion to fund state and local governments’ efforts to fight addiction, a majority of the $13 billion payout from Purdue Pharma coffers would be funded through future sales of OxyContin. Furthermore, a $3 billion penalty does little to put a dent in the family’s expansive $13 billion net worth. Since the first lawsuit condemning Purdue’s role in misleading the public about the addictive nature of OxyContin in 2007, the Sacklers have strategically siphoned billions of dollars out of the company and into their own pockets. In the months leading up to the bankruptcy filing, New York Attorney General Letitia James accused the Sacklers of wiring over $1 billion Swiss to bank accounts. Forbes “conservatively” estimates that the family is worth $14 billion. Does $3 billion for their role in promulgating a national health crisis seem so fair now?
The protection of the Sackler family fortune hinges on two major factors. The first is whether the Chapter 11 filing is approved. If the deal goes through, then it is highly likely that the Sackler family will be able to pay their $3 billion and walk away with clean hands. If the filing is denied in court under arguments that the company was not under financial strain at the time of the filing, then negotiations may start from square one. Many state attorneys general fear that the proposed settlement may be a deal or no deal situation and support the settlement because it promises money to treat their current public health crisis.
Other states have begun to aggressively prosecute the Sackler family beyond the proposed settlement. Massachusetts was the first state to specifically target the family after it uncovered their instrumental role in a company-wide initiative to push OxyContin onto doctors who would prescribe the painkillers in high dosages. Massachusetts Attorney General Maura Healy is spearheading the first lawsuit against the Sacklers, calling their bankruptcy filing as an example of “billionaires looking to use the bankruptcy process as a vehicle to further shield their assets and escape their accountability.” North Carolina Attorney General Josh Stein sees the current deal as a short-changing of the American public. In a statement released on Sept. 11, he announced that he was preparing to sue the Sackler family individually. Such a suit against the family — rather than their company — offers hope that more money can be extracted from the drug dynasty’s deep pockets to help states like North Carolina pick up the pieces from a broken pain-treatment system.