The Sackler family owned Purdue Pharma and made billions, which immediately marks them as evil in a world where fabulous wealth is prima facie evidence of wrongdoing. But there’s more beef to the claim than mere wealth.
Earlier this week, thousands of municipal governments and nearly two dozen states tentatively reached a settlement with the Sackler family and the company it owns, Purdue Pharma, maker of OxyContin.
The argument is that Purdue, and by extension the Sacklers, aggressively pushed oxy onto physicians, who prescribed it with reckless abandon, whose patients used it to excess, became addicted, had it in their medicine cabinets for their kids to steal, and produced an opioid epidemic. Or to put the argument in more realistic context, there’s an opioid crisis, people died and are dying, and someone must pay. Who better than the fabulously wealthy Sacklers who got the benefit of oxy?
OxyContin is a powerful opioid. For a great many people who suffer from pain, their lives would be a nightmare without it. For a great many other people, their lives are a nightmare with it. Was this the Sacklers’ fault? More than 2300 claims, and a global settlement by state attorneys general, say so, and blame Purdue Pharma’s tactics for the crisis rather than the docs who prescribed it or the people who used it. And so a global settlement was reached.
But then, it appeared that the Sacklers might still have some money left, and that cannot be.
The New York attorney general’s office said on Friday that it had tracked about $1 billion in wire transfers by the Sackler family, including through Swiss bank accounts, suggesting that the family tried to shield wealth as it faced a raft of litigation over its role in the opioid crisis.
In the scheme of Sackler family wealth, a billion here and there isn’t a big thing, but to New York Attorney General Letitia James, it’s worth a headline.
The wire transfers are part of a lawsuit against Purdue and individual Sacklers in New York. Letitia James, now the state’s attorney general, had issued subpoenas last month to 33 financial institutions and investment advisers with ties to the Sacklers in an effort to trace the full measure of the family’s wealth.
“While the Sacklers continue to lowball victims and skirt a responsible settlement, we refuse to allow the family to misuse the courts in an effort to shield their financial misconduct,” Ms. James said in a statement. “Records from one financial institution alone have shown approximately $1 billion in wire transfers between the Sacklers, entities they control, and different financial institutions, including those that have funneled funds into Swiss bank accounts,” she added.
Perhaps AG James is entirely unfamiliar with how settlements work, or perhaps she just likes to strum on the heartstrings of the public when she uses a phrase like “lowball victims.” If the AGs don’t like the settlement, don’t settle. Fight it. Try it. Take no Sackler prisoners. That’s why they build courthouses, and there is nothing to prevent the AGs from filling up the back benches.
But if it’s true that there was a billion dollars moved into Swiss bank accounts, so what? The measure of damages isn’t the last dime available to the defendants.
A statement from a firm representing Mortimer D.A. Sackler, a former Purdue board member, said: “This is a cynical attempt by a hostile A.G.’s office to generate defamatory headlines to try to torpedo a mutually beneficial settlement that is supported by so many other states and would result in billions of dollars going to communities and individuals across the country that need help.”
It could well be that a persuasive argument in reaching a settlement was that there was no more blood to get from the Purdue Pharma or Sackler stone, but that doesn’t appear to be the case.
Under the deal, the Sackler family would pay $3 billion in cash over seven years.
In the scheme of things, three bil ain’t no big thing.
The settlement does not include an admission of wrongdoing.
But there’s another underlying bit of leverage at play, that if Purdue Pharma goes bankrupt, then there’s a good chance there won’t be any money for anyone for quite a while, and when there is, it could be less than the settlement amount. But as neither the Sacklers nor Purdue Pharma concede that they did wrong by producing a pain medication that was extremely effective and wildly successful, they were responsible for its excessive prescription or abusive use.
Still, AG James’ headline grab, following on the heels of a settlement, brings the stench back.
The statement released on behalf of Mr. Sackler said: “There is nothing newsworthy about these decade-old transfers, which were perfectly legal and appropriate in every respect.”
Even wealthy people get to make money over their lives, careers, business dealings. They get to pay themselves, and pay themselves well even if you (or I) think it’s a bit too well. They get to live in mansions and fly in private jets, drink champagne and eat Osetra when the Beluga runs dry, because they’re rich and in this country, it’s not a crime to be rich. Or at least it didn’t used to be.
It was unclear whether Ms. James’s initial findings of new Sackler funds would influence the parties that have agreed to the settlement.
“Saying there’s a billion in transfers doesn’t mean anything to me unless it leads to a lot more information,” said Joe Rice, one of the lead counsels for the municipalities that reached the settlement agreement. Getting a comprehensive picture of the family’s international wealth would require an “Easter egg hunt over some period of time,” he said, and a further complication is that not all of the family members served on the board of Purdue Pharma.
Are the Sacklers liable for the opioid crisis? Can there be no settlement if the AGs don’t dig up every dime a Sackler has? Will this end up serving the interests of states and municipalities seeking funds to address the opioid epidemic now if there is no settlement reached for years or if Purdue Pharma goes bankrupt?
And what will the chronic pain sufferers, for whom OxyContin was the medication that allowed them to function, do when the opioid crisis leaves them without any medication, and no pharma will fill in the oxy gap after seeing what happened to the Sackler family? Bottom line is businesses, even pharma, exist to make money, not to produce headlines for attorneys general.