Medicines of Mass Destruction

April 29, 2021

The business world is littered with chisellers, small-time grifters, rapacious bankers, environmental despoilers, robber baron Rockefeller types, power-hungry press barons, sleazy lawyers, fraudsters like the late Bernie Madoff, and then, in a category all to themselves, monsters like the Sackler family who made billions and singlehandedly created America’s opioid holocaust. 

Police find a grandmother and her boyfriend overdosed on opioids with her grandson in the back seat in 2016, a photo released by Ohio police. Time

This upsetting photo was published widely and focused attention on the opiate catastrophe. (The two addicts were revived and the child was placed in foster care with relatives.) The shocking portrait illustrated why so-called white-collar crimes should be punished as severely as are street crimes because of the toll they extract. For instance, several of Madoff’s victims committed suicide, including one of his two sons, and capitalist crimes ruin marriages, childhoods, businesses, careers, towns, stock markets, and sometimes regions or nations. And yet few culprits see the inside of a jail. Madoff died in one and deserved to.

But the mayhem caused by America’s most hated family, the Sacklers, may change laws. The family’s story began as a rags-to-riches story of immigrants whose three sons – Arthur, Mortimer, and Raymond – became physicians and psychiatrists. In 1952, the brothers bought a small pharmaceutical company called Purdue-Frederick, but the oldest, Arthur, also owned an advertising agency. He combined both interests and pioneered aggressive marketing and incentive campaigns then sold directly to physicians. He singlehandedly put Valium on the map and established a culture that later catapulted OxyContin, Fentanyl, and a host of opioids into the big leagues — and spawned an addiction crisis that has killed 500,000 and ruined millions of lives.

Arthur died in 1987 and his one-third stake was bought by Mortimer and Raymond. They renamed it Purdue Pharma and in 1996 launched OxyContin. By 2001, the addictive opiate was a blockbuster drug and represented 80 percent of Purdue’s sales. But their marketing methods drew attention from authorities and the company was charged and paid a record $630 million in criminal and civil fines in 2007 for mislabeling OxyContin and other offenses. Three non-family executives pleaded guilty to criminal charges, but did not spend a day in jail, and, it was later alleged, had been paid by the family to take the fall. In 2007, Mortimer stepped down as co-chair then died in 2010 and Raymond took over.

After that legal dust-up, the company promised to shift its focus to abuse-deterrent formulations, but continued to market and fib about opioid side effects to doctors and, worse, formulated an “extra strength” version of OxyContin to boost sales. Purdue sales personnel were pushed to sell to doctors, through incentives and pressure, and sales skyrocketed. By 2016, the Sacklers had become one of the richest families in the country, and their cultural philanthropy garnered them praise and status in all the smart salons in New York and London, and Paris.

Metropolitan Museum of Art, Egyptian hall. Washington Post

But in 2017, a New Yorker article linked the family and its company to the drug pandemic that was ravaging the country. Raymond died that year, but in 2018 the next generation -- Richard Sackler, Theresa Sackler, Kathe Sackler, Jonathan Sackler, Mortimer Sackler, Beverly Sackler, David Sackler, and Ilene Sackler -- were all named as defendants in suits filed by numerous states.

One lawsuit, according to The Times, claimed the company and members of the family “knew that putting patients on high dosages of OxyContin for long periods increased the risks of serious side effects, including addiction. Nonetheless, they promoted higher dosages because stronger pain pills brought the company and the Sacklers the most profit.”

Accused Sacklers. Global TV

By 2018, the company and owners were buried under 3,000 lawsuits, mostly from local and state governments. Then the Department of Justice began investigating. Two years later, in October 2020, a settlement with Justice officials was announced: Purdue Pharma would file a bankruptcy plan to set up trusts that would distribute $4.28 billion of its assets to states, local governments, and tribal organizations for opioid abatement programs over the next nine years. The Sacklers would give up ownership of Purdue’s domestic operations, but retain control over overseas subsidiaries for seven years and would admit no wrongdoing. This allowed family members to walk away scot-free from further litigation, or criminal action, and to keep an estimated $13 billion in assets they had accrued.

This was a travesty. A Congressional hearing was held in December which resulted in calls for jail sentences and in the proposed legislation, called the Sackler Act, designed to close a loophole in order to prevent the bankruptcy court from indemnifying the family from all future legal actions. The settlement, announced with fanfare by the Trump government, had also ignored the fact that the family began making obscene payouts to themselves after agreeing in 2007 to behave and as the addiction crisis raged out of control.

This looked like fraudulent conveyance – the attempt to avoid debt or to make assets inaccessible, by transferring money or assets to another person or company. This occurs sometimes in divorces or business partnerships in advance of a break-up. If proven, such maneuvers can be unwound. For this and other reasons, two dozen state attorneys general rejected the bankruptcy scheme, and issued a joint statement describing Purdue as a "criminal enterprise" and demanded more money upfront to help communities affected by opioid addiction to pay for treatment and public health services. “This plan does not go as far as it needs to," said North Carolina Attorney General Josh Stein, adding that a final deal must include "more money from the Sacklers."

There are also demands that criminal charges be laid. At a Congressional hearing in December, the family was compared to Joaquin “El Chapo” Guzman, the Mexican drug kingpin. “He was sentenced to life in prison," said Rep. Peter Welch, a Democrat from Vermont. "Yet no one from the Sackler family is in jail. Many of us think that's not right."

It certainly isn’t. A street drug dealer who peddled bootleg OxyContin would have netted a sentence of ten years in prison and a $10,000 fine per offense. As Republican James Comer of Kentucky said people in his state serving time for drug-dealing "have had to forfeit their assets. They have broken homes and the cost to society is immeasurable. But you all [Sacklers] have created the same harm to society, yet you are one of the wealthiest families in America. I hope that the courts hold you accountable."

Chiseling off the names of the drug family at a university medical school. NPR

The Sacklers are besieged and should be. Some institutions have been shamed into removing their name, but it still adorns plenty of museum, gallery, and university buildings. Their mansions, yachts, art collections, and bank accounts should be confiscated, but the Trump Justice Department didn’t see things that way. Patrick Radden Keefe, the author of Empire of Pain about the Sackers, is not hopeful about justice unless the Sackler Act is invoked, and the bankruptcy plan is rejected, subjecting them to ongoing litigation. If not, he said, “they'll pay an amount that's, in absolute terms, a lot of money. But if you look at the amount of money they took out of the company, during a period of time when the company has now acknowledged, it was committing fraud, it's like 40 cents on the dollar.”

Hopefully, the bankruptcy court tosses out the arrangement, and charges are someday laid against them for peddling medicines of mass destruction.

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