Capitalism’s rot apparent in OxyContin settlement
There will be no justice in the opioid epidemic, which has so far claimed the lives of more than half a million opioidoverdose victims in North America since it began in the late 1990s.
A landmark development last week provided more certainty of that dreadful outcome and revealed much of what ails capitalism.
On Sept. 1, Purdue Pharma LP, widely accused of igniting the crisis with its OxyContin opioid painkiller, and the Sackler family that has owned and run the privately held Purdue for more than six decades, reached a settlement with about 120,000 U.S. state and local governments, families and individuals that
have sued Purdue for opioidrelated damages.
The settlement, agreed on in a U.S. Bankruptcy Court and subject to appeal, has the Sacklers donating Purdue to a newly formed public trust whose profits will go to drug addiction treatment and prevention programs across the U.S., and pays restitution to victims’ families.
The settlement does not cover the more than 19,000 opioid-overdose fatalities in Canada between January 2016 and September 2020 alone. That is the latest reporting period and includes only a portion of the pandemic-induced increase in fatal opioid overdoses in the past year.
Last year, opioid overdoses killed 521 people in the city of Toronto, a 78 per cent increase from 2019, the last pre-pandemic year. The number keeps rising despite elaborate and costly efforts by Toronto and other communities to expand local treatment and prevention programs and commit more police resources to degrading the black market for illicit drugs.
With those costs in mind, along with lost productivity, higher health-care costs and increased criminal-justice expenses, U.S. states suing Purdue told the bankruptcy court that the total damage done to the U.S. economy so far by the opioid crisis amounts to more than $2.1 trillion (U.S.).
The Sacklers are accused of setting the match to one of the biggest public-health conflagrations in history. It is a parallel crisis to the coronavirus pandemic, with a death toll equal to more than 70 per cent of total COVID-19 fatalities in North America. And it shows no signs of ebbing.
The Sackler family acknowledges that it profited by about $10 billion from Purdue’s sales of OxyContin.
But the Sacklers say they have done nothing wrong. And no member of the family has been charged for Purdue’s role in the opioid crisis.
Purdue long ago became
Public Enemy No. 1 in the opioid epidemic, though this epic tragedy extends far beyond the Stamford, Conn.based company. It includes other makers and distributors of opioid drugs, a group of which agreed last week to a $26-billion settlement of opioid-related lawsuits.
Purdue has twice pleaded guilty to U.S. government felony charges, in 2007 and again last year. Purdue was charged with misleading doctors about the highly addictive properties of OxyContin, which its salespeople greatly downplayed, and with other improper marketing tactics.
But the U.S. government will never see the billions of dollars in restitution Purdue agreed to pay, since Purdue filed for Chapter 11 bankruptcy protection in 2019.
Purdue first put OxyContin on the market in 1996. Just three years later came the first reports of OxyContin overdose deaths. Purdue continued to aggressively market OxyContin. In 2010, Purdue recorded $2.3 billion in OxyContin sales.
Today, most opioid-overdose fatalities result from the use of fentanyl, a synthetic opioid that can be as much as 100 times more potent than morphine. Fentanyl is often mixed with heroin or cocaine.
But for many victims, their introduction to opioids was a prescription opioid medication made by Purdue, Johnson &
Johnson and other drug firms.
In the Purdue settlement Sept. 1, which is subject to appeal, Purdue and the Sacklers agree to pay a sum that the settlement puts at $4.5 billion.
But Purdue might not be able to crank out $4.5 billion in profits between now and 2030, when the payments are to cease under terms of the settlement.
Purdue is a second-tier drug firm. It is insolvent. Sales of its flagship OxyContin have dropped by about three-quarters since 2010 as Big Pharma companies and generics have cut into its market share.
And there are two flashpoints to the settlement.
It grants the Sacklers what they most sought, lifetime immunity from future opioidrelated lawsuits.
And it leaves the bulk of the Sacklers’ fortune intact — an estimated $8.7 billion worth of assets outside the drug industry, in real estate, private equity investments and more than $100 million (U.S.) worth of art.
More than 90 per cent of the creditors, including a large majority of the 48 U.S. states that have sued Purdue, voted for the settlement. The states need the money to cover their spiralling opioid-related costs and aren’t willing to endure several more years of litigation.
But some prominent holdouts to the deal are infuriated.
Bob Ferguson, attorney general of Washington state, denounced the settlement as “morally and legally bankrupt.” He said it enables the Sacklers to “walk away as billionaires with a lifetime legal shield.”
William Tong, attorney general of Connecticut, is angry that the Sacklers might end up with a bigger fortune than ever. An expert witness testified during the bankruptcy hearings that money left to the Sacklers by the settlement could enable them to grow their fortune to $14.6 billion by 2030.
“Not only is that outrageous, it’s unjust,” Tong said.
More revealing than he intended was David Sackler’s testimony at the Purdue hearings. The grandson of late Purdue co-owner Raymond Sackler told the court that “our family cares deeply that OxyContin was part of the opioid crisis, but it was unintentional.”
“We don’t believe our conduct was illegal in any way, and we want to help.”
Deconstruct that passage and you see the rot in contemporary capitalism.
There usually is no social sanction for corporate conduct that is destructive but not illegal.
The law treats companies as “individuals,” and holds them accountable while applying light or no sanctions on the people who own and run them.
And there are limits to the Sacklers’ desire to help. About $8.7 billion worth of them.
So far, restitution related to the opioid crisis amounts to less than $50 billion. And almost all of it, including the Purdue settlement, is subject to appeal and further litigation — 22 years after it was first reported that prescription opioids were killing people.
Put that trifling amount alongside the $246-billion settlement with the U.S. tobacco industry reached more than two decades ago, or the estimated $2-trillion cost of the opioid crisis, and the imbalance in the scales of economic and social justice in this case are plain to see.