Opioid addiction deals: Pharma family buys its way out of accountability 

A US bankruptcy court gave Purdue Pharma's owners immunity from further civil suits. They don’t have to admit wrongdoing — and they may end up richer than they started

Lynn Wencus holds a sign with a picture of her son Jeff and wears a sign of others' loved ones lost to OxyContin and other opioids during a protest at Purdue Pharma LLP headquarters in Stamford, Conn, in 2018. Picture: AP Photo/Jessica Hill

Corporate money has a powerful and malign influence on so many aspects of American life.

But even by that low standard, events this past week in a New York bankruptcy court are shocking.

The legal system has effectively allowed one of America’s richest families to buy its way out of accountability for what a White House commission called “America’s national nightmare” of mass opioid addiction.

Last Wednesday, the court approved a deal for the dissolution of the opioid manufacturer Purdue Pharma, which kicked off the opioid epidemic two decades ago with its illegal drive to sell a high-strength painkiller, OxyContin.

Ed Bisch, who lost his 18-year-old son Eddie to an overdose nearly 20 years ago, has spent more than a decade pushing for the Sacklers to be criminally prosecuted. Picture: AP Photo/Matt Rourke

Purdue’s owners, members of two branches of the now-notorious Sackler family, are estimated to have made more than $10bn from the drug — even as the opioid crisis claimed more than 600,000 lives, with the toll climbing higher by the year.

Astonishingly, the Sackler family seems to have been able to work the bankruptcy process to buy themselves immunity from accountability in the civil courts — in return for handing over only a small fraction of the money they made from OxyContin — and still remain one of the richest families in the country. 

All while continuing to deny their responsibility for their role in creating the opioid crisis.

At this point, Purdue Pharma’s reputation is little better than that of a Mexican cartel.

The company has twice pleaded guilty to felonies — in 2007 and last year — including lying about the risk of addiction from OxyContin, bribing doctors to prescribe it and defrauding the US federal government.

But that barely scratches the surface of the company’s corruption in pursuit of profit: it used its money and influence to warp the practice of medicine, compromise drug regulators and keep open the doors to mass prescribing of opioids even as evidence of an epidemic grew.

No bystanders

The Sacklers behind Purdue were not bystanders. Several members of the family served on the company’s board and as senior executives, and some were directly involved in the drive to push OxyContin on unsuspecting Americans. And they happily creamed off the profits.

Yet the bankruptcy process has granted them sweeping immunity from further civil lawsuits over the opioid crisis without acknowledgment of wrongdoing. In fact, in exchange for a payment of $4.5bn (€3.8bn), less than half of their earnings from Purdue, the Sacklers as individuals won’t have to declare personal bankruptcy.

In addition, as a Georgetown university law professor, Adam Levitin, told the US Congress in July, the Sacklers have worked the system so that they “will actually emerge from Purdue’s bankruptcy richer than they went into it” because the payments will be spread over nearly a decade during which the family’s assets are likely to grow by more than $4.5bn.

The US justice department has questioned whether the agreement is legal because it deprives those victimised by the Sacklers, who oversaw and profited from Purdue Pharma’s criminal behaviour, of their right to a day in court.

Other critics of the decision have wondered how a bankruptcy court can grant legal immunity to people who have not declared bankruptcy.

But that is the practice that has evolved under laws, many written under the influence of corporations, that enable businesses to in-effect hand-pick the judges who will handle their bankruptcy cases.

The US has 375 bankruptcy judges but, as Levitin told Congress, just three oversaw the majority of cases filed by large companies last year. Purdue Pharma chose to file with one of those three, Judge Robert Drain, to decide the conditions of its bankruptcy.

Although Purdue is based in Connecticut, it filed for bankruptcy in White Plains, New York, where Drain is the only bankruptcy judge. It’s unlikely to have gone unnoticed by the Sacklers’ lawyers that Drain had an unusual record of putting lawsuits on hold against third parties who have not filed for bankruptcy.

One of Drain’s first steps was to block efforts to sue individual members of the Sackler family, even though they were separate from the Purdue bankruptcy case.

Then he permitted the Sacklers to effectively hold the plaintiffs hostage by offering a stark choice between settling for a cut of the profits of misery in return for wiping the legal slate clean or facing years of court battles.

States, municipalities and families desperate for money to cope with the huge social consequences of the epidemic were left with little choice but to agree, although many expressed their distaste.

'Morally and legally bankrupt'

Others intend to challenge the deal in different courts, including Washington state’s attorney general, Bob Ferguson, who called the plan “morally and legally bankrupt”.

All of this might be more palatable if the Sacklers had shown remorse for the blood on their hands.

Dr Richard Sackler, a former president and chairman of Purdue Pharma, was instrumental in persuading the US Food and Drug Administration (FDA) to approve OxyContin on the false grounds that it was less addictive than other prescription opioids. He then promised that “a blizzard of prescriptions” for the drug would bury the competition.

When Sackler was asked at the bankruptcy hearing whether he, his family or his firm bore any responsibility for the opioid epidemic, he simply replied: “No”.

Instead, Sackler and other members of his family have spent their time smearing the victims. They have claimed that OxyContin was a legal drug used illegally and that responsibility therefore falls on the “criminal addicts” who overdosed.

Judge Drain said he was unhappy with the outcome of the case but that his hands were tied. He said:

This is a bitter result. 

He argued that he had little choice but to agree to the Sacklers’ demands or risk no financial settlement at all.

The judge’s critics say the outcome was preordained from the moment Purdue filed its case in his court.

But it is an outcome that fits with the history of a uniquely American epidemic.

No other country has experienced the same scale of opioid addiction and death, in part because corporations in other countries do not wield the same influence over the practice and regulation of medicine.

Neither did Purdue act alone in this crisis. Drug distributors and pharmacies jumped on the bandwagon.

Other opioid manufacturers, such as Johnson & Johnson, raked in the profits of narcotic painkiller addiction. Even as evidence of a crisis grew and doctors witnessing the devastation sounded warnings, the din of corporate money drowned them out.

The quarter of a billion dollars a year the drug industry spends on lobbying bought the complicity of politicians, influenced regulators, weakened investigations by the justice department and stalled action by the Drug Enforcement Administration.

Purdue used its political muscle to head off even more serious criminal charges and to keep its executives out of prison.

Above all, the drug industry kept the doors to mass prescribing of opioids open for years not because they were an effective way to treat pain but because they were hugely profitable.

Those same firms are now increasingly agreeing to payouts to head off a torrent of lawsuits — but it’s hard to conclude that they regard it as anything more than the cost of doing business.

Not least because, like the members of the Sackler family behind Purdue, none of them admit to having done anything wrong.

Chris McGreal is the author of American Overdose: The Opioid Tragedy in Three Acts