No liability for family or no deal
STAMFORD — Purdue Pharma co-owner David Sackler told a bankruptcy court Tuesday that his family would not accept a settlement of the thousands of lawsuits against the OxyContin maker without receiving broad legal protections, while he was also grilled about the escalation of the opioid crisis during his time as a Purdue director.
Among the most divisive terms in Stamford-based Purdue’s settlement plan is a stipulation for the Sacklers who the company to be released from the pending lawsuits, as well as potential claims related to Purdue. The Sacklers have not personally filed for bankruptcy.
Those prospective releases are a condition of the Sacklers’ offer to contribute about $4.3 billion in cash to the settlement proposal, which Purdue values at more than $10 billion. Connecticut and eight other states have rejected the settlement plan and oppose the releases.
“We need a release that is sufficient to get our goals accomplished,” David Sackler said during his testimony, which was given remotely and lasted about three hours, on the fourth day of the confirmation hearing for a judge to review Purdue’s plan. “If the release fails to do that, then we will not support it… This release is essential for the funding of the settlement.”
Purdue’s plan also seeks releases for more than 1,000 other parties associated with Purdue and its owners, including Sackler family members not directly involved with the company.
As part of the settlement, the Sacklers have also agreed to relinquish control of Purdue so that it could be
restructured into a new “public benefit company” focused on using its funds to tackle the opioid crisis. In addition, they have proposed selling their international pharmaceutical businesses.
Despite their settlement offer, the Sacklers have denied the accusations in many lawsuits, including Connecticut’s, that they were involved in the deceptive marketing of OxyContin.
The plaintiffs assert that the proliferation of OxyContin in the past generation fueled an epidemic of addiction and fatal overdoses from prescription and illicit opioids. In Connecticut, 1,273 people died in 2020 from opioid-involved overdoses — up 13 percent from 2019.
“I don’t believe the allegations against our family are legally meritous,” Sackler said. “Our family cares deeply that OxyContin was a part of the opioid crisis, though it was unintentional. And though we don’t believe our conduct was illegal in any way, we want to help.”
Similarly, the Sacklers who own Purdue did not admit any wrongdoing in a $225 million settlement reached last year with the
Department of Justice that resolved allegations that they committed marketing and financial misconduct. Purdue, as a company, pleaded guilty last November to three criminal charges of conspiring to defraud the government and violate anti-kickback law.
If a settlement were not reached, Sackler said that “I believe we would litigate the claims to their final outcome.”
In December 2018, Connecticut filed its lawsuit against the company and named David Sackler and seven other Sacklers among individual defendants. The state’s lawsuit and other pending complaints against Purdue and the Sacklers have been halted as a result of court orders.
“If David Sackler and the Sackler family believe they have a moral responsibility to help, they need to step up, acknowledge their role in the opioid crisis and be a partner because what they have done is not enough,” Connecticut Attorney General William Tong said in a statement Tuesday, after David Sackler testified.
The state has opposed Purdue’s settlement plan since the company filed for Chapter 11 bankruptcy in
September 2019 in a federal court in White Plains, N.Y.
California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont and Washington, as well as the District of Columbia, also oppose the plan.
Questions about Sackler’s time as Purdue board director
During cross-examination, David Sackler faced questions from Maryland Assistant Attorney General Brian Edmunds, as well as queries from attorneys for other parties, about his involvement in Purdue as a board member from 2012 to 2018.
Late Purdue co-founder Raymond Sackler is David Sackler’s grandfather. His father is Richard Sackler, a former board member who also formerly served as the company’s president.
Richard Sackler and the six other Sacklers named in Connecticut’s lawsuit each left Purdue’s board during approximately the same period as David Sackler. At that point, Purdue was being sued by local and state governments around the country.
“You were aware at the time you became a director of Purdue Pharma that opioids were killing tens of thousands of people?” Edmunds asked.
“Yes, I was aware there was an ongoing problem with opioid overdoses,”
Sackler said.
“And that opioid overdoses would kill thousands more in the years in which you served on the board?” Edmunds asked.
“I didn’t know that at the time I joined,” Sackler said.
Minutes later, Edmunds asked, “did you expect that increasing Purdue Pharma’s sales of opioids would help in preventing the future deaths of people, of Americans, from opioid overdoses?”
“I believe actually the answer in my expectation was yes,” Sackler said. “And the reason I believed that is that prior to my joining the board, Purdue had reformulated OxyContin to make it abuse-deterrent… Furthermore, the company was spending hundreds of millions of dollars developing other abuse-deterrent opioids, which we hoped we could bring to market.
“The idea in increasing the sales was to take market share from non-abusedeterrent products, thereby reducing abuse and diversion of the category as a whole and hopefully thereby having a positive effect on opioid overdoses,” Sackler said.
“In fact, opioid overdoses went up during the time since you became a director of Purdue Pharma — have they not?” Edmunds asked.
“They have gone up, and Purdue’s market share has declined,” Sackler said.
“Obviously, the hopes I had for increasing Purdue sales were not realized.”
While OxyContin’s annual sales have steadily declined in recent years — plunging from about $3 billion in 2010 to around $1 billion in 2020 — the lawsuits assert that the drug’s revenues do not fully show its impact.
“Hundreds of people in Connecticut have died or overdosed after obtaining prescriptions for Purdue opioids,” according to the state’s lawsuit.
Critics of Purdue also accuse the company of contributing to a trend of overprescribing opioids that extended beyond the company’s products.
Overseen by Judge Robert Drain, the confirmation hearing for Purdue’s settlement plan is ongoing. It started Aug. 12 and could last up to about two weeks.
If Drain were to approve Purdue’s plan, Tong has said that Connecticut would “consider all of our viable options at that time.”
Separate from the bankruptcy, David Sackler also testified last December during a Congressional hearing. He and his relatives were condemned by representatives on both sides of the aisle, as many lawmakers called for them to be criminally prosecuted.