The case involving opioid makers Purdue Pharma owned by the Sackler family, who have given generously to a number of museums and galleries around the world, has been settled by the US Justice Department.
The Company has agreed to pay $225 million in civil penalties to resolve the allegations that Perdue aggressively marketed the addictive OxyContin brand opioids and caused doctors to overprescribe the medication, leading to abuse and addiction on a mass scale.
It also settles claims that the Sackler run company transferred assets from Purdue into holding companies and trusts to hide that funds from future creditors in a bankruptcy case. The settlement does not release the Sacklers or Purdue executives from criminal or civil claims in future lawsuits which was the big worry of individuals trying to sue the Company for compensation. It will also be possible to jail members of the Sackler family for activities connected to this costly scandal.
Photographer Nan Goldin who has worked tirelessly for a ‘just’ resolution to the case stated tonight; “This news is nothing to celebrate. The DOJ settlement with the Sacklers and Purdue is not a win—it’s a spin. The crimes have been laid out, but no one has been indicted. Headlines have reported an $8 billion settlement when in reality, only $500 million has been promised. This proves that there are two justice systems in America—one for billionaires and one for the rest of us. The Sacklers’ walking away from Purdue is a retirement, not a punishment”.
Richard Sackler’s arrogance has single-handedly destroyed his family’s reputation as credible philanthropists. They are no longer considered part of polite society as Museums around the world busily scrub off the family name from their entrances and marble-clad walls. As the owner of Purdue Pharma, makers of the highly addictive drug OxyContin, his Company has been responsible for the death of almost twice as many as the U.S. total for deaths from COVID19.
Today, the Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP (Purdue), and a civil resolution of its civil investigation into individual shareholders from the Sackler family. The resolutions with Purdue are subject to the approval of the bankruptcy court.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”
“Today’s resolution is the result of years of hard work by the FBI and its partners to combat the opioid crisis in the U.S.,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office. “Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients. The FBI remains committed to holding companies accountable for their illegal and inexcusable activity and to seeking justice, on behalf of the victims, for those who contributed to the opioid crisis.”
“The opioid epidemic remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary L. Cantrell Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services’ Office of Inspector General. “Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being. With our law enforcement partners, we will continue to combat the opioid crisis, including holding the pharmaceutical industry and its executives accountable.”
“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” said Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott. “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion. The devastating ripple effect of Purdue’s actions left lives lost and others addicted. DEA will continue to work tirelessly with our partners and the pharmaceutical industry to address the damage that has been done, and bring an end to this epidemic that has gripped the nation for far too long.”
Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the Company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the Company to State and local governments under the department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.
The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the Company’s executives or employees receiving civil releases.
While the global resolution with the Company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the Company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest. Indeed, not only will the PBC endeavor to deliver legitimate prescription drugs in a manner as safe as possible, but it will aim to donate, or provide steep discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, and the proceeds of the trust will be directed toward State and local opioid abatement programs. Based on the value that would be conferred to State and local governments through the PBC, the department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount. The department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC so that its public health goals can be best accomplished.
The Criminal Pleas
As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the Company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas. The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion. The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.
In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.
The Civil Settlements
The department’s civil settlements resolve the United States’ claims as to both Purdue and its individual shareholders, members of the Sackler family.
The civil settlement with Purdue provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion. This settlement resolves allegations that from 2010 to 2018, Purdue caused false claims to be submitted to federal health care programs, specifically Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Indian Health Service. The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion. For example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times. It also resolves the government’s allegations that Purdue engaged in three different kickback schemes to induce prescriptions of its opioids. First, Purdue paid certain doctors ostensibly to provide educational talks to other health care professionals and serve as consultants, but in reality to induce them to prescribe more OxyContin. Second, Purdue paid kickbacks to Practice Fusion, as described above. Third, Purdue entered into contracts with certain specialty pharmacies to fill prescriptions for Purdue’s opioid drugs that other pharmacies had rejected as potentially lacking medical necessity.
Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers). This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted. Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market. The Named Sacklers then approved a new marketing program beginning in 2013 called “Evolve to Excellence,” through which Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts” as their peers, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.
The civil settlement also resolves the government’s allegations that from approximately 2008 to 2018, at the Named Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were otherwise voidable as fraudulent transfers.
Today’s resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers.
Today’s announcement was made by Deputy Attorney General Jeffrey A. Rosen; Acting Assistant Attorney General of the Civil Division Jeffrey Clark; U.S. Attorney for the District of Vermont Christina Nolan; and First Assistant U.S. Attorney for the District of New Jersey Rachael Honig. The criminal investigation was conducted by the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, the Consumer Protection Branch of the Department of Justice’s Civil Division, and the FBI’s Washington, D.C. and Newark Field Offices, with assistance by the DEA and the U.S. Attorney’s Office for the Northern District of Ohio. The civil settlements were handled by the Fraud Section of the Commercial Litigation Branch of the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, with assistance from the Department of Health and Human Services, Office of General Counsel and Office of Counsel to the Inspector General; the Defense Health Agency; and the Office of Personnel Management. The Purdue bankruptcy matter is being handled by the U.S. Attorney’s Office for the Southern District of New York and the Civil Division’s Commercial Litigation Branch, Corporate/Finance Section.
Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only. There has been no determination of liability in the civil matters.
Nan Goldin said last week, “Pain is once again an unwelcome guest, exposing what we understand to be Purdue’s schemes and presenting facts that other players in the bankruptcy case often ignore: the bribing of a medical record company to push doctors to prescribe their opioids (as reported by Reuters); the injunction that shields Purdue’s owners from future lawsuits across the country; and proposed multi-million-dollar bonuses for its executives, even after the Company declared bankruptcy. The court has ruled against us every time, so far. They underrate us because we are so few. But look at what Pain has done with only a dozen members. Now, we have formed the Ad-Hoc Committee for Accountability, with parents who lost their children to OxyContin, pushing for the public disclosure of all of Purdue’s records.
The Sacklers hope to strike a deal for immunity with the Department of Justice (D.O.J.) by Election Day (as reported by the New Yorker). We need to act fast. On 15 October, Members of Congress wrote to Attorney-General William Barr about their “deep concern regarding recent alarming reports suggesting that Purdue Pharma, the maker of OxyContin, and members of the Sackler family are nearing a plea agreement with the Department of Justice, which would foreclose any federal criminal liability without a single person serving a single day in prison”.
Congress must do more than write letters. It must hold hearings in which the Sacklers and victims of their opioid profiteering are called to testify. The family must not escape with their billions. Just as tobacco executives answered to the nation under oath about their misconduct, so should the Sacklers. Survivors and advocates deserve a chance to tell their stories. We will continue to fight our institutions to address the injustice of the opioid epidemic. While we fear the Sacklers will buy their way out as they always have, but they can’t buy back their reputation.”
Nan Goldin is a leading photographer and activist. This statement was written in collaboration with Harry Cullen, Megan Kapler and Mike Quinn—members of the organisation she helped found, Pain (Prescription Addiction Intervention Now)
A letter written last week addressed to the U.S. Attorney General from organisations including Goldin’s P.A.I.N. Dated 14 October 2020
The Honorable William P. Barr Attorney General of the United States U.S. Department of Justice
950 Pennsylvania Ave. NW Washington D.C. 20530
Dear Attorney General Barr:
We are individuals and organisations that have been gravely affected by the opioid crisis, and we write to ask for the opportunity to meet with Department of Justice attorneys before the D.O.J. agrees to a settlement with Purdue Pharma, the maker of OxyContin, and its billionaire owners, the Sacklers.
Many of us wrote to you on 31 August 2020, to urge the D.O.J. to seek justice for the victims of opioid industry executives.1 We urged D.O.J. “to hold members of the Sackler family and other Purdue executives personally responsible for their criminal acts in furtherance of their company’s wrongdoing.”
Since then, we learned from press reports that the Sacklers are pushing D.O.J. to sign a deal that would betray the thousands of victims of the opioid epidemic.2 Under the Sacklers’ proposal, the D.O.J. would settle in October, before the ongoing investigation of the Sacklers is complete. Purdue would admit to crimes, but no individual who committed the crimes would be charged.
The Sacklers would pay $255 million and be allowed to keep more than $12 billion of their fortune and walk away with immunity. Purdue would be preserved as a “public benefit company” to continue selling OxyContin and give the Sacklers a family legacy. Their proposal is a wish-list of everything the perpetrators could want to escape justice.
Our perspective about this case is important. Purdue and the Sacklers changed our lives. We have lost our own family members to overdoses, testified in the 2007 Purdue criminal case, and have founded.
Public advocacy and support groups such as FED UP!, Learn to Cope, P.A.I.N., and R.A.P.P. We are committed to supporting the people whose lives have been devastated by the opioid epidemic and revealing the facts about what caused the crisis so that it never happens again.
It is appropriate for D.O.J. attorneys to meet with us to hear our concerns. The Crime Victims’ Rights Act, codified at 18 U.S.C. § 3771, requires that the victims of crime have “the reasonable right to confer with the attorney for the Government in the case.”
When we meet with D.O.J. attorneys, we plan to discuss six concerns:
First, D.O.J. should listen to survivors. Purdue and the Sacklers were allowed to do so much damage for so long because many of the people they hurt were silenced and stigmatised. We will not be silent. More than a decade ago, several of us testified at Purdue’s criminal sentencing in Abington, Virginia. We told the world what it meant to lose members of our families to Purdue’s dangerous drugs. We warned the nation that, if D.O.J. let the perpetrators escape accountability, that would only encourage more crime. We were right.
The Sacklers got plenty of opportunities to meet with D.O.J. The Sacklers’ lawyers have access to D.O.J. at its highest levels. Legal bills filed in the bankruptcy show thousands of hours of high-paid lawyers pushing for a settlement that favors the Sacklers. Please give us an hour with the D.O.J. legal team to listen to our point of view.
Second, D.O.J. should complete its investigation. Richard Sackler is scheduled to testify under oath in a deposition on November 19 and 20. Mortimer Sackler is scheduled to testify on 10 November. Kathe Sackler is scheduled to testify on 5 November. It would be irresponsible for the D.O.J. to settle this case before the most important witnesses testify.
Third, D.O.J. should name and charge the individuals who broke the law. There should be no settlement that says the Purdue Pharma corporation committed crimes but fails to charge the individuals who broke the law. The public is wary of a justice system that protects executives and settles for empty convictions of corporations, where no one goes to jail.
In this case, filing charges against the Company, instead of individuals, will mean there is no accountability. Purdue is already bankrupt. All of Purdue’s money is already going to be paid to its creditors. Why have a Justice Department at all, if all that it can do is impose a fine on a company with no more money to lose?
Fourth, Purdue should be shut down. The press reports that the D.O.J. plans to preserve Purdue as a “public benefit company” to keep selling OxyContin and to give the Sacklers a family legacy. This disgusts us. This Company has been killing our children for twenty years. Purdue Pharma should die. Thousands of companies go out of business every year and are not rescued by the government. For our government to prop-up Purdue and give OxyContin a special public status is the opposite of justice.
Fifth, all of Purdue’s documents should be disclosed. After destroying thousands of families, the main way Purdue can benefit the public now is by revealing the evidence of its crimes. Purdue says it is
turning over all its assets to the public in the bankruptcy. The asset that matters most is the server holding Purdue’s email. As part of any settlement, the D.O.J. must require that all of Purdue’s documents are turned over to a disclosure trust, overseen by a board of independent journalists, so that they can be published online.
Sixth, no one should keep money they got by breaking the law. A basic job of the Justice Department is to make sure crime does not pay. The Sacklers collected a personal fortune of more than $13 billion, not counting whatever value remains at Purdue.3 It is being reported that they want to settle for $225 million. That is less than two percent of what they got from their crimes. It does not make sense. If D.O.J. believes the Sacklers are innocent, it should say so. If D.O.J. believes the Sacklers killed thousands of people, then letting them buy their way out for two percent of their wealth is obscene. Taxpayers will not stand by while the D.O.J. makes a cheap settlement in this landmark case. We deserve for D.O.J. to get it right.
Thank you for considering this letter. We know the D.O.J. has many important responsibilities, including this case. We write to you with respect, and with the hope that you will lead the D.O.J. to take the time to listen to our concerns. We ask the D.O.J. attorneys meet with us to hear our views. Please contact us through Emily Walden, national chair of the FED UP! Coalition at firstname.lastname@example.org
Emily Walden, Kentucky Chair of FED UP! 502-759-4116
Ed Bisch, New Jersey
Witness at Purdue’s 2007 Criminal Sentencing Founder of R.A.P.P. (Relatives Against Purdue Pharma)
Harrison Cullen, New York
Member of P.A.I.N. (Prescription Addiction Intervention Now) and Oxyjustice
Nan Goldin, New York
Artist and Founding Member of P.A.I.N.