OxyContin maker funneled $13B to Sacklers: Prosecutors
Purdue Pharma, the maker of the prescription painkiller OxyContin, funneled up to $13 billion to the Sackler family, according to state prosecutors contesting the firm's tentative agreement to settle thousands of opioid-crisis lawsuits.
The deal doesn't include an admission of wrongdoing from the Sacklers, wouldn't stop family members from future misconduct and would not force them to repay money "they pocketed from their illegal conduct," the attorneys general argued in court filings.
They object to Purdue's request that all lawsuits against members of the Sackler family be halted under terms being considered in federal bankruptcy court in White Plains, New York. The family faces hundreds of lawsuits in state courts, including at least two dozen filed by states.
The documents revealed that members of the Sackler family -- ranked as one of the 20 wealthiest families in the U.S. by Forbes -- reaped $12 billion to $13 billion from Purdue, a higher amount than court records had previously given. The time period over which the payments were made wasn't specified in an excerpt from last month's deposition of Jesse DelConte, a restructuring consultant for Purdue.
Former Purdue CEO Richard Sackler, in a previous deposition, gave only a broad range of income — of $1 billion to $10 billion — that the family garnered from Purdue's signature painkiller, OxyContin.
Purdue is one of five drug companies to make a settlement with the Ohio counties of Cuyahoga and Summit to avoid the first federal trial over a nationwide epidemic of opioid abuse. The latest was Johnson & Johnson, and its Janssen Pharmaceutical subsidiary, which reached a deal worth more than $20 million with the two Ohio counties on Tuesday.
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The lawsuits allege that Purdue -- and the Sackler family -- contributed to a public health crisis that has claimed the lives of nearly 400,000 people since 1999 by aggressively marketing opioids while downplaying their addiction and overdose risks.
“The Sacklers are billionaires, they are not bankrupt,” Massachusetts Attorney General Maura Healey told Reuters in an interview. “They should not be allowed to use the filing to shield their assets.”
Healey’s office previously alleged that members of the family received over $4 billion in payments from April 2008 to 2016, a figure calculated from board meeting minutes.
Purdue’s settlement offer in the case, set to go to trial in Cleveland later this month, could be worth as much as $12 billion over time. Half of the state attorneys general and lawyers representing local governments in the matter accepted it.
Still, the bankruptcy court filings this week, most of them on Friday, showed the level of dissent among the group, which had been seeking a nationwide settlement.
"If the states accepted the offer, there would never be a trial to determine the Sacklers' liability for one of the greatest public health crises of our time"
Many prosecutors argue that the Purdue offer does not hold the Sackler family sufficiently accountable for a crisis that has contributed to more than 400,000 overdose deaths in the U.S. over the past two decades. That's why, they argued, the state cases against the family should continue even as Purdue's bankruptcy plays out.
"The Sacklers have decided to offer up Purdue and see if they can outrace justice for a price they deem acceptable," the government attorneys said in their filing.
The proposal would allow Purdue to be operated as a public benefit trust. Any profits the company makes would be part of the settlement, as would the value of overdose antidotes and a treatment drug in development.
The Sacklers would give up control of the company and contribute $3 billion to $4.5 billion toward the settlement, an amount that depends partly on how much they receive from selling their global opioid business, Mundipharma.
A bottle of 40-milligram OxyContin pills. The prescription painkiller is made by Purdue Pharma. REUTERS/George Frey (REUTERS)
"The offer does not shut down Purdue; instead it would keep Purdue in business under a new name, so that settlement money could be collected from future OxyContin sales," the attorneys general said in their filing. "If the states accepted the offer, there would never be a trial to determine the Sacklers' liability for one of the greatest public health crises of our time."
The company has told the bankruptcy court judge that, if the family continues to face hundreds of lawsuits across the country, it might be "unwilling — or unable" to contribute to the settlement.
The 500 governments that jointly filed on Friday said the company had it "backwards," and the filing stated that “the Sacklers' failure to make an adequate contribution itself impairs the prospect of achieving a consensual plan of organization.