Oxycontin Founding Family Are Now Forced to Defend Profits In Court
By Mark A. York (June 20, 2018)
(MASS TORT NEXUS MEDIA) As more states and federal agencies continue to scrutinize the opioid drug manufacturers across the country, a clear high value target is emerging in Purdue Pharma, L.P. and the Sackler family that founded the company. The family has profited to the tune of about $13 billion to date, and have somehow avoided the legal spotlight for the last 10 years. The Sackler family have always been protected by the company shield, even though their most profitable selling opioid drug Oxycontin and its boardroom coordinated marketing campaign was the brainchild and a direct result of the Purdue Pharma company founders, the Sackler brothers and their tried and true business model.
That is now changing, as the State of Massachusetts, filed a lawsuit against Purdue Pharma and the Sackler family as well as various Purdue executives over the prescription painkiller OxyContin. Oxycontin is now recognized as the opioid fuse that ignited America’s opioid crisis. This is the first time where Purdue’s leading executives and members of the multibillionaire Sackler family, now known to be feuding over the opioid crisis have been named in civil litigation.
The Sacklers named in the lawsuits include Theresa and Beverly, widows of Purdue founders, brothers Mortimer and Raymond Sackler and Ilene, Kathe and Mortimer David Alfons Sackler, three of Mortimer’s children; Jonathan and Richard Sackler, Raymond’s two sons; and David Sackler, Raymond’s grandson. The Sackler family is worth conservatively, an estimated$13 billion, according to Forbes, which has been generated from sales of OxyContin. As is normal procedure by the Sackler family and the company itself, the Sackler family feuding members always decline requests for comment on the catastrophic opioid crisis and avoid discussing any Purdue Pharma links to how the crisis came about.
PURDUE PHARMA NAMED IN 600 OPIOID LAWSUITS
Dozens of states, counties and local governments have independently sued opioid drugmakers in both state and federal courts across the country, (see OPIOID-CRISIS-BRIEFCASE-MDL-2804-OPIATE-PRESCRIPTION-LITIGATION by Mass Tort Nexus) with claims alleging all opiate drug makers, distributors and now the pharmacies engaged in fraudulent marketing to sell the powerful painkillers. They also failed to monitor and report the massive increases in opioid prescriptions flooding the US marketplace. Which has now resulted in fueling the nationwide epidemic, that’s reported to have killed over a quarter million people. The now organized approach steps up those efforts as officials sift evidence and are now holding not only the companies, but the executives and owners culpable in the designing the opioid crisis.
Purdue Pharma is facing a legal assault on many fronts, as cities, counties and states have either filed suit or are probing the company for an alleged role in the United States’ opioid and addiction epidemic. Now, a lawsuit from Massachusetts’ attorney general Maura Healey is the first to bring the company’s current and former execs into the mix, including the billionaire family with sole ownership of Purdue.
At a news conference this week, Healey said she’s filing suit against the drugmaker, plus current and former executives and board members, “for their role in creating and profiting from this epidemic that has killed so many.” The suit alleges Purdue downplayed risks and overstated benefits of opioid painkillers, including OxyContin. It seeks to link the deaths of 670 Massachusetts residents to actions at the company.
A Purdue spokesman said the company shares concern about the opioid crisis. Purdue is “disappointed, however, that in the midst of good faith negotiations with many states, the Commonwealth has decided to pursue a costly and protracted litigation process,” he said.
Purdue is no stranger to litigation, in 2007 Purdue agreed to pay $19.5million in civil penalties, but did not admit wrongdoing, to settle lawsuits with 26 states – including Massachusetts – and the District of Columbia after being accused of aggressively marketing OxyContin to doctors while downplaying the risk of addiction. This is a consistent pattern, including the 2007 criminal indictment and plea of senior Purdue Pharma executives, where they agreed to pay over $600 million and plead guilty to a greatly reduced charge of “mislabeling drugs” which seems to have set the stage for the Purdue legal strategy of throwing money at all claim of abuse, thereby setting the Purdue Pharma marketing model loose on the US consumers and the healthcare industry, see USA vs. Purdue Criminal Plea “Oxycontin” usdc.virginia.gov/OPINIONS July 2007
PURDUE PHARMA FIRES ENTIRE SALES FORCE
In what is either an amazing coincidence or a look at corporate political maneuvering, just a week after the Sacklers and company executives were named individually in the latest Purdue Pharma opiate lawsuit, the OxyContin maker laid off its entire sales force. This puts an end to an era for Purdue that at one point, was the top-selling opioid drug in the country, and became synonymous with the nation’s opioid crisis, while the Sacklers collected billions in profits from Oxycontin sales.
Purdue, had already laid off half of its 600 sales reps in February 2018, as part of the corporate political maneuvering to curry favor with the numerous state and federal investigation that were taking place, when it announced that it would no longer be promoting OxyContin to doctors. On July 19, 2018 six days after the State of Massachusetts filed a complaint naming the company, the founding Sackler family and the executive suite as defendants in a an opioid litigation complaint, Purdue Pharma confirmed that they had terminated the the remaining 220 employees in its sales force.
While Purdue still manufactures Oxycontin, which accounts for more than 80 percent of the company’s, they will be shifting its focus away from the highly lucrative opiate painkiller market, according to company sources.
PURDUE PHARMA DENIES ALL CLAIMS
We vigorously deny the Commonwealth’s allegations and look forward to presenting our substantial defenses to these claims,” Purdue’s spokesman said in a statement.
Executives named in the suit are current and former Purdue CEOs Craig Landau, John Stewart and Mark Timney, as well as current and former members of the Purdue board of directors, including members of the Sackler family. Dr. John Purdue Gray and George Frederick Bingham founded the company in 1892, and Mortimer and Raymond Sackler purchased Purdue in 1952, which is now owned solely by the Sackler family,.
The lawsuit alleges the company violated Massachusetts’ consumer protection statute, created a public nuisance, and that it was negligent. It seeks restitution, damages and penalties related to the alleged actions, plus injunctive relief. The company has generated more than $500 million in revenue in Massachusetts since 2008, the AG says.
“Time after time, in doctor visit after doctor visit—and there were thousands of doctor visits made to hundreds of doctors around this state—there were misrepresentations,” Healey said at a news conference. “There were lies about the efficacy, about the safety, about the supposed nonaddictive nature of their product.”
The State of Massachusetts lawsuit is the latest in a wave of complaints against the company and Big Pharma opiate drug makers involved in making and distributing opioids. Hundreds of cities and counties have filed lawsuits, and the cases are now grouped in federal court in Cleveland in MDL 2804, Opiate Prescription Litigation in front of Judge Daniel Polster. Early this year, the judge in the multidistrict litigation indicated that the sides might be able to reach a settlement, but the negotiations later hit “barriers.” The judge charted a course for a few cases to go to bellwether trials.
Aside from cities and counties, dozens of state officials and the feds have gotten involved. Attorneys general from 41 states are investigating and discussing a possible settlement with the company. Last month, six states sued Purdue over its role in the epidemic, according to USA Today. The U.S. Department of Justice is also backing cities and counties in their legal efforts.
The Sackler family name graces some of the nation’s most prestigious bastions of culture and learning — the Sackler Center for Arts Education at the Guggenheim Museum, the Sackler Lefcourt Center for Child Development in Manhattan and the Sackler Institute for Developmental Psychobiology at Columbia University, to name a few.
Now for the first time since the opioid crisis came to the attention of America, the Sackler name is front and center in a lawsuit accusing the family and the company they own and run, Purdue Pharma, of helping to fuel the deadly opioid crisis that has killed thousands of Americans.
Congratulations to the Massachusetts Attorney General Maura Healey took the unusual step of naming the eight members of the Sackler family listed above as part of the conspiracy that profited from and cause the catastrophic opioid crisis that’s gripping the USA to this day.
The 80-page complaint (Complaint: “State of Massachusetts vs. Purdue Pharma and the Sackler Family” June13, 2018) that accuses Purdue Pharma of spinning a “web of illegal deceit” to boost profits.
While prosecutors in more than a dozen other states hit hard by the opioid epidemic have sued Purdue Pharma, Healey is the first to name individual Sackler family members, along with eight company executives.
(The Sackler family regularly notes that Arthur Sackler, whose philanthropy got his name on the Smithsonian’s Sackler Gallery in Washington and other cultural institutions, died before Purdue began selling OxyContin. Several of his nieces and nephews help run the company.)
Filed on behalf of 670 Massachusetts residents who were prescribed OxyContin, became addicted to opioids and later died, the suit alleges that Purdue deceived doctors and patients about the risks, pushed prescribers to keep patients on the drugs and aggressively targeted veterans and the elderly.
The civil suit doesn’t name a dollar figure, but Healey asked a judge to order the Sacklers and Purdue to “pay full and complete restitution to every person who has suffered any ascertainable loss by reason of their unlawful conduct.”
Mike Moore, the former Mississippi attorney general who took down Big Tobaccotwo decades ago and is now going after Big Pharma, called Healey’s move “a brilliant legal strategy.”
“It pulls up the corporate curtain of protection that these people hide behind,” Moore said in an email to NBC News. “The Sacklers personally made billions of dollars while tens of thousands of overdose deaths were occurring as a direct result of their lies about the addictiveness and effectiveness of OxyContin, the drug they created and marketed. Just as these folks like to be honored when they write big checks to museums and have their names inscribed on plaques for their contributions to so many causes, they should be held accountable for how they made that money in the first place.”
SACKLER FAMILY KNOWN FOR PHILANTHROPY
Juliet Sorensen, a former federal prosecutor in Chicago who is now a professor at Northwestern University’s Pritzker School of Law, said that the Sacklers are known for their philanthropy — “not for being the driving force behind the opioid epidemic through which they gained their billions.”
“The Sacklers’ collective silence signals a lack of remorse for their role in the opioid epidemic,” she said in an email. “The complaint is a form of exposure.”
“If the Sacklers were not actually defendants that were sued, but rather named and discussed in the body of the complaint, that would be naming and shaming but without legal consequences,” she said. “In this case, however, they are named as defendants, so the naming and shaming ‘pitiless publicity’ effect comes along with potential legal liability.”
The Sacklers named in the complaint are now used to defending thensleves individually and when asked to cooment, the standard Purdue reply was offered by Purdue Pharma spokesman Bob Josephson in an email not a personal quote, “Not at this time.”
Purdue Pharma denied the allegations in the lawsuit, saying it was “disappointed” that, amid negotiations with other states that have sued, Massachusetts “decided to pursue a costly and protracted litigation process.”
“We will continue to work collaboratively with the states towards bringing meaningful solutions,” the company said.
MASSACHUSETTS HOLDS SACKLERS LIABLE
Emalie Gainey, a spokeswoman for Healey, said the attorney general’s intent in naming the Sacklers was “to hold them individually liable for the role we allege they played.”
“Not only did we name the company today, but we’ve also chose to name executives and directors,” Healey said when the lawsuit was announced. “Ours is the first lawsuit in the country to name those executives personally and tell the story of how they contributed to this deadly crisis.”
Mississippi was the first state to sue Purdue Pharma and the other big pharmaceutical companies, and the state’s attorney general, Jim Hood, said he approved of the message Massachusetts is sending.
“No individual should be above the law and allowed to hide behind corporate protections to shield them from personal responsibility,” Hood said via a spokeswoman. “That includes the Sackler family. Mississippi applauds the efforts of Massachusetts in joining our efforts and seeking accountability wherever it lies.”
In Ohio, the second state to go after the drug companies, including Purdue Pharma, Dan Tierney, a spokesman for Attorney General Mike DeWine, said individual Sackler family members “would certainly be covered” by the state’s action.
The Sackler family is the 19th richest in the nation, with an estimated fortune of $13 billion, according to Forbes.
The Sacklers involved with Purdue Pharma are the descendants of brothers Mortimer and Raymond Sackler. Their eldest brother, Arthur, died in 1987, well before Purdue began making and selling OxyContin. Arthur also worked in pharmaceuticals and developed a reputation for cleverly marketing new drugs directly to doctors, convincing them to prescribe medications including tranquilizers to their patients.
Arthur was inducted into the Medical Advertising Hall of Fame after his death, but he has also been criticized for originating “most of the questionable practices that propelled the pharmaceutical industry into the scourge it is today,” as Allen Frances, the former chair of psychiatry at Duke University School of Medicine, told the New Yorker last year.
Arthur’s family has made a point of noting that he was not involved in the sale of OxyContin and would prefer him to be remembered for his philanthropy, including funding the Arthur M. Sackler Gallery of Chinese Stone Sculpture at The Metropolitan Museum in Manhattan and the Arthur M. Sackler Museum at Harvard University.
“None of the charitable donations made by Arthur prior to his death, nor that I made on his behalf after his death, were funded by the production, distribution or sale of OxyContin or other revenue from Purdue Pharma,” his widow, Jillian Sackler, said in a February statement. “Period.”
Seven of the Sacklers named in the suit have been on the Purdue board since the 1990s, according to the suit, while David Sackler, the grandson, has served since 2012.
The board met on a weekly — sometimes daily — basis while the company was being investigated by 26 states and the Justice Department from 2001 to 2007, according to the lawsuit. In 2007, the board settled and agreed to pay a $700 million fine after the company’s CEO at the time, Michael Friedman, and two other high-ranking company officials pleaded guilty to misleading doctors and patients about opioids.
KENTUCKY LEGAL FIGHT TO KEEP SACKLER TESTIMONY SEALED
In an example of the past coming back to haunt the present, in 2015 Purdue Pharma agreed to pay $24 million to settle a lawsuit filed by Kentucky, December 22, 2015 Purdue Pharma Settlement With State of Kentucky, which Purdue thought would end that problem by paying a fine and moving on, which isn’t the case it seems. See Purdue Pharma settles with Kentucky over Oxycontin claim(statnews.com/pharmalot) for information on the claims in Kentucky.
That state court litigation is now subject to an ongoing legal battle in the Kentucky courts where Purdue is fighting to keep the original court records from that settlement sealed, due to the only deposition testimony of one of the Sackler brothers is known to be located. The Purdue court records were unsealed by Pike County Judge, Stephen Combs in May 2016 and Purdue immediately appealed with oral arguments taking place June 26, 2017 in front of a three judge panel of the Kentucky Court of Appeals, which as of June 20, 2018 has not issued a ruling on releasing the records. The original Kentucky vs. Purdue docket information is case no. 07-CI-01303, Judge Stephen Combs, Pike County Circuit Court of Kentucky.
OxyContin was hailed as a medical marvel when it debuted in 1995. Pitched as balm for people suffering from moderate to severe pain, it reportedly generated more than $35 billion in revenue for Purdue Pharma.
But its chief ingredient is oxycodone, a cousin of heroin. And prosecutors say Purdue played down the dangers of addiction while getting hundreds of thousands of Americans hooked on opioids.
Purdue has argued that OxyContin is approved by the Food and Drug Administration and accounts for just 2 percent of the opioid prescriptions nationwide.
There are now more than 600 lawsuits naming Purdue Pharma, LP as a defendant in both federal and state court actions, this does not include the potential criminal indictments of not only the company but the Purdue family members that may be emerging. Damages are expected to easily exceed $100 billion versus the company and now that the Sacklers and company executives have been named individually the whole scope of litigation may be changing for the better, as those who profited most from the opioid crisis are now being held accountable.