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Sackler family and Purdue Pharma to pay 12 billions to settle opioid lawsuits

Courtroom showdowns still face OxyContin maker Purdue Pharma and the family that owns it, the Sacklers.

But after a tentative settlement reached Wednesday with thousands of local governments and more than 20 states, the fight will be less about the damage done by the company and more over how to divide its assets.

The agreement could be worth up to $12 billion over time. That amount includes future profits for the company, the value of overdose antidotes it’s developing and cash payments of $3 billion to $4.5 billion from the Sacklers. The amount is contingent on the sale of the family’s international drug company, Mundipharma, which, like Purdue, has been criticized for overselling the benefits of its powerful prescription opioid painkillers and understating the risks.

Critics are fuming that the deal won’t be worth close to the stated $12 billion, that it won’t force internal company documents to be made public and that it doesn’t do enough to hold the company or its owners responsible. “The idea that Purdue might get away without having to admit any wrongdoing flies in the face of every definition of justice and accountability known to the human race. It’s unconscionable,” said Ryan Hampton, a Los Angeles-based advocate for people in recovery from opioid addiction.

For the Stamford, Ohio-based company, one of the next steps is a bankruptcy filing, which would likely end lawsuits filed against the company by some 2,000 counties, municipalities, Native American tribes, unions and hospitals, along with nearly every state.

Parities that don’t sign on to the settlement could raise objections in bankruptcy court — and some states have made it clear that that’s their plan.

“Far too many lives have been lost or devastated in Rhode Island as a result of the opioid crisis,” Rhode Island Attorney General Peter Neronha said in a statement Wednesday. “Before we could responsibly reach any agreement, we would need much more information about the financial holdings of Purdue Pharma and the Sacklers to be confident that this resolution adequately compensates Rhode Island and, equally as important, holds the company and its owners accountable for the enormous destruction they have caused. We are committed to continuing to aggressively pursue our claims against Purdue Pharma and the Sacklers.”

The state was already suing some members of the Sackler family, which was listed by Forbes magazine in 2016 as one of the 20 richest in the country. On Wednesday, it added more family members to the suit. More than 20 other states also have legal claims against family members, and many plan to keep pursuing them.

On the other side, several attorneys general said the agreement was a better way to ensure compensation from Purdue and the Sacklers than taking their chances if Purdue files for bankruptcy on its own.

Arizona Attorney General Mark Brnovich said the deal “was the quickest and surest way to get immediate relief for Arizona and for the communities that have been harmed by the opioid crisis and the actions of the Sackler family.”

But even advocates of the deal cautioned that it’s not yet complete.

“There’s still a lot of telephone calls going on. I think we see the outlines of a thing that might be, but it’s not yet,” Ohio Attorney General Dave Yost said in an interview.

Opioid addiction has contributed to the deaths of some 400,000 Americans over the past two decades, hitting many rural communities particularly hard.

The tentative agreement and expected bankruptcy filing would remove Purdue from the first federal trial over the opioids epidemic, scheduled to begin next month in Cleveland.

In a statement after Wednesday’s announcement, the company said that it “continues to work with all plaintiffs on reaching a comprehensive resolution to its opioid litigation that will deliver billions of dollars and vital opioid overdose rescue medicines to communities across the country impacted by the opioid crisis.”

Members of the Sackler family said in a statement that there are good reasons for governments to join the settlement: “This is the most effective way to address the urgency of the current public health crisis, and to fund real solutions, not endless litigation.”

Background

The Sackler family are descendants of Isaac Sackler and his wife Sophie (née Greenberg), Jewish immigrants to the United States from Galicia (now Ukraine) and Poland, who established a grocery business in Brooklyn. The couple had three sons, Arthur, Mortimer, and Raymond Sackler who each went to medical school and became psychiatrists. In 1952, the brothers bought a small pharmaceutical company, Purdue Fredericks, in Connecticut. Arthur, the oldest brother, became a pioneer in medical advertising. After his death in 1987, his option on one third of that company was sold by his estate to his two brothers.

Their private company, now known as Purdue Pharma, introduced OxyContin in 1996, a version of oxycodone reformulated in a slow-release form. Heavily promoted, oxycodone is seen as a key drug in the emergence of the opioid epidemic. Elizabeth Sackler, daughter of Arthur Sackler, claimed that her branch of the family did not participate in or benefit from the sales of narcotics but rather pioneered the controversial direct-to-physician marketing methods that Purdue Pharma used. In 2018, members of the Sackler family, Richard Sackler, Theresa Sackler, Kathe Sackler, Jonathan Sackler, Mortimer Sackler, Beverly Sacker, David Sackler, and Ilene Sackler, were named as defendants in a suit filed by the state of Massachusetts over their involvement in the opioid crisis.

The family was first listed in Forbes list of America’s Richest Families in 2015.

Philanthropy

The Sackler family has made a name as philanthropists and supported major cultural institutions, including the Jewish Museum (Manhattan); Metropolitan Museum of Art; the American Museum of Natural History; the Guggenheim; the Smithsonian; the Tate Gallery; the National Gallery; the Natural History Museum, London; the Victoria and Albert Museum; the Royal Botanic Gardens, Kew; the British Museum; Shakespeare’s Globe; the Serpentine Galleries; and the Louvre.

The family also supported universities, including Harvard University, the University of Oxford, the University of Cambridge, Columbia University, Tufts University, New York University, the Royal College of Art, the University of Sussex, and the University of Edinburgh. The Sackler Faculty of Medicine at Tel Aviv University is named after Arthur, Mortimer, and Raymond Sackler for their donations. Similarly, the Sackler Institute of Pulmonary Pharmacology at King’s College London was named after Mortimer and Theresa Sackler.

According to The New York Times, the Louvre in Paris was the first major museum to “erase its public association” with the Sackler family name. On July 16, 2019 the museum had removed the plaque at the gallery entrance about Sacklers’ donations made to the museum. Throughout the gallery, grey tape covered signs such as Sackler Wing, including signage for the Louvre’s Persian and Levantine artifacts collection, which was removed on July 8 or 9. Signage for the collection had identified it as the Sackler Wing of Oriental Antiquities since 1997.