State law­suit in­ten­si­fies scrunity of own­ers

Stamford Advocate (Sunday) - - Front Page - By Paul Schott

STAM­FORD — Con­necti­cut At­tor­ney Gen­eral Ge­orge Jepsen’s law­suit filed this month against Pur­due Pharma named 15 peo­ple. Eight of those de­fen­dants have the last name Sack­ler.

Amid the tor­rent of lit­i­ga­tion al­leg­ing the OxyCon­tin maker has fu­eled the na­tional opi­oid cri­sis by fraud­u­lently mar­ket­ing its drugs, a grow­ing num­ber of com­plaints are di­rectly ac­cus­ing mem­bers of the Sack­ler fam­ily, who own Pur­due and hold a num­ber of its board seats. Law­suits like Con­necti­cut’s could also in­crease the like­li­hood of the bil­lion­aire fam­ily con­tribut­ing to a mas­sive set­tle­ment to re­solve the hun­dreds of claims against the firm.

“As a re­sult of the lit­i­ga­tion, the Sack­ler name is be­com­ing more pub­lic — and in a neg­a­tive way,” said Robert Bird, a pro­fes­sor of busi­ness law at the Univer­sity of Con­necti­cut. “Once their name is as­so­ci­ated with the opi­oid cri­sis, it’s dif­fi­cult to erase the con­nec­tion.”

In a state­ment, Pur­due de­nied the law­suit’s al­le­ga­tions.

“Pur­due and the in­di­vid­ual de­fen­dants will ag­gres­sively de­fend against these mis­lead­ing al­le­ga­tions,” the state­ment said, in part. “In the mean­time, we con­tinue to fight for bal­ance in the pub­lic dis­course so that so­ci­ety can si­mul­ta­ne­ously help pain pa­tients in need and cre­ate real so­lu­tions to the com­plex prob­lem of ad­dic­tion.”

None of the Sack­ler de­fen­dants — Bev­erly Sack­ler, David Sack­ler, Ilene Sack­ler Le­f­court, Jonathan Sack­ler, Kathe Sack­ler, Mor­timer D.A. Sack­ler, Richard Sack­ler and Theresa Sack­ler — could be reached for com­ment.

Al­leged mis­con­duct

The law­suit as­serts that the eight Sack­lers, sev­eral other board mem­bers and two for­mer CEOs were closely in­volved in false mar­ket­ing of opi­oids, in­clud­ing OxyCon­tin. Those drugs ac­count for the re­sound­ing ma­jor­ity of the com­pany’s rev­enues, which are es­ti­mated to to­tal more than $3 bil­lion an­nu­ally, ac­cord­ing to the com­plaint.

Those of­fi­cials de­vel­oped the poli­cies un­der­pin­ning thou­sands of vis­its to doc­tors by sales rep­re­sen­ta­tives who en­cour­aged in­ap­pro­pri­ate opi­oid pre­scrib­ing, the law­suit said. The sales force

al­legedly tried to get more pa­tients on higher doses, for longer pe­ri­ods.

“A small group of peo­ple con­trolled Pur­due and got ex­traor­di­nar­ily rich from it,” the law­suit said. “With their po­si­tion of author­ity came the obli­ga­tion to act re­spon­si­bly. The di­rec­tors and CEOs that are de­fen­dants in this ac­tion dis­re­garded their obli­ga­tion and in­stead di­rected Pur­due’s mas­sive and deadly de­cep­tion.”

Reck­less and in­dis­crim­i­nate opi­oid pre­scrib­ing has been widely linked to the epi­demic abuse of le­gal and il­licit opi­oids. In 2017, about 49,000 peo­ple died of opi­oid over­doses — a four-fold in­crease from 2002 — ac­cord­ing to pre­lim­i­nary data from the U.S. Cen­ters for Dis­ease Con­trol and Pre­ven­tion.

The over­sight of Sack­ler board mem­bers and for­mer ex­ec­u­tives ex­tended to track­ing the num­ber of sales rep­re­sen­ta­tives em­ployed by the com­pany and the fre­quency and cost of their doc­tor-of­fice vis­its, the law­suit said.

Pur­due pro­hib­ited its sales pro­fes­sion­als from writ­ing emails to doc­tors to en­cour­age opi­oid pre­scrib­ing, be­cause do­ing so could cre­ate ev­i­dence of mis­con­duct, the law­suit said. Sales rep­re­sen­ta­tives who emailed doc­tors were dis­ci­plined and re­ported to the board, ac­cord­ing to the law­suit.

Par­al­lel­ing its de­nials of other law­suits’ al­le­ga­tions, the lat­est Pur­due state­ment fo­cuses on the U.S. Food & Drug Ad­min­is­tra­tion’s ap­proval of its med­i­ca­tions.

It said pre­scrip­tion opi­oids are “among the most tightly con­trolled medicines” in the U.S., with reg­u­la­tions that in­clude “black box” la­bel warn­ings about ad­dic­tion and over­dose risks. It also said the com­pany has pro­moted its opi­oids based on the ev­i­dence in its FDA-ap­proved la­bel­ing.

At the same time, the state­ment said Pur­due shared Jepsen’s con­cerns about the opi­oid cri­sis. It cited the com­pany’s fund­ing for a num­ber of ini­tia­tives, in­clud­ing dis­tri­bu­tion of nalox­one, a drug that can re­v­erse opi­oid over­doses; pre­scrip­tion-drug mon­i­tor­ing and ed­u­ca­tion; and re­search and de­vel­op­ment of opi­oids that are more dif­fi­cult to abuse.

Mount­ing lit­i­ga­tion

A law­suit filed in June by Mas­sachusetts’ at­tor­ney gen­eral, Maura Healey, levied sim­i­lar ac­cu­sa­tions against the Sack­ler board mem­bers. Pur­due has also de­nied that com­plaint’s al­le­ga­tions.

About 250 mu­nic­i­pal and county law­suits against Pur­due are also be­ing amended to add the Sack­lers as de­fen­dants, ac­cord­ing to Paul Hanly, an at­tor­ney for those plain­tiffs.

About 200 of those cases are be­ing han­dled in a Cleve­land fed­eral court, where hun­dreds of other com­plaints in­volv­ing Pur­due and other opi­oid mak­ers are be­ing heard.

The pend­ing lit­i­ga­tion against those phar­ma­ceu­ti­cal firms could be re­solved in a mas­sive set­tle­ment sim­i­lar to the nearly $250 bil­lion deal reached with the to­bacco in­dus­try in 1998. Fi­nal­iz­ing such an agree­ment could take sev­eral more months, or even years.

“One would pre­sume if Pur­due is set­tling that the Sack­lers are go­ing to want to have their li­a­bil­ity ex­tin­guished as well,” Hanly said. “Po­ten­tially, they are li­able. And, if the in­for­ma­tion out there in the pub­lic is any­where near ac­cu­rate, (they have) po­ten­tially very deep pock­ets.”

The Sack­lers ranked as the 19th-rich­est fam­ily in the U.S., with a net worth of some $13 bil­lion, ac­cord­ing to 2016 rank­ings com­piled by Forbes.

Fam­ily mem­bers have owned Pur­due since 1952, when brothers Ray­mond and Mor­timer Sack­ler pur­chased the firm when it was based in Man­hat­tan.

Other groups have tar­geted the Sack­lers out­side the le­gal sys­tem, fo­cus­ing on in­sti­tu­tions that have re­ceived mul­ti­mil­lion-dol­lar do­na­tions from the fam­ily.

In March, pro­test­ers con­verged in the Sack­ler Wing of the Metropoli­tan Mu­seum of Art in Man­hat­tan, where they un­folded ban­ners and threw pill bot­tles marked “OxyCon­tin” into the wing’s re­flect­ing pool.

Dur­ing sev­eral protests held last sum­mer out­side Pur­due’s down­town head­quar­ters, at 201 Tresser Blvd., many demon­stra­tors de­nounced the Sack­lers for run­ning a pur­port­edly “crim­i­nal” or­ga­ni­za­tion.

Rem­i­nis­cent of the Met event, some par­tic­i­pants at an Aug. 17 protest de­posited empty pill bot­tles in front of the en­trance. The cap­sule la­bels listed the Sack­ers as the pre­scriber, with a warn­ing of “ex­tremely ad­dic­tive, will kill” and an Rx num­ber of “200,000 dead.”

New ap­point­ments

While the Sack­lers re­main own­ers, the com­pany has made sev­eral key lead­er­ship changes in the past year.

In July, the com­pany an­nounced a new board chair­man, cor­po­rate-turn­around spe­cial­ist Steve Miller, and a new gen­eral coun­sel, Marc Kes­sel­man, who for­merly served in the same po­si­tion for the U.S. De­part­ment of Agri­cul­ture.

Pur­due has not made Miller or Kes­sel­man avail­able for in­ter­views since they were ap­pointed.

As­sess­ing the ex­tent of board turnover is dif­fi­cult be­cause pri­vate own­er­ship lim­its Pur­due’s pub­lic dis­clo­sures. Its board mem­ber­ship is not listed on its web­site.

Seven of the Sack­ler de­fen­dants have served on the board since the 1990s, and the other joined in 2012, ac­cord­ing to the Con­necti­cut law­suit.

“I sus­pect the Sack­lers who own the com­pany are tak­ing the long view,” UConn’s Bird said. “There are no share­hold­ers, so the Sack­lers do not have to re­spond to day-to-day pres­sure. They’re ei­ther be­ing cau­tious or prob­a­bly see­ing that any hasty man­age­ment de­ci­sions would be harm­ful to their long-term in­ter­ests.”

Bob Luckey Jr. / Hearst Con­necti­cut Me­dia

Sev­eral hun­dred pro­test­ers gath­ered for a rally out­side Pur­due Pharma’s head­quar­ters on Aug. 17, at 201 Tresser Blvd. in down­town Stam­ford.

Su­san Dunne / As­so­ci­ated Press

Art gallery pro­pri­etor Luis Al­varez, left, and sculp­tor Domenic Es­pos­ito stand be­side an 800-pound sculp­ture of a bent, burnt heroin spoon placed in front of the Stam­ford head­quar­ters of Pur­due Pharma to protest the com­pany’s man­u­fac­tur­ing of opi­oids on June 22.

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