The fam­ily be­hind maker of OxyCon­tin

De­spite the Sack­ler name on mu­se­ums, they’ve re­treated

The Morning Call - - BUSINESS CYCLE - By Ge­off Mul­vi­hill

For a fam­ily with its name on a wing of one of the world’s most fa­mous mu­se­ums and a school at a pres­ti­gious univer­sity, mem­bers of the Sack­ler clan have done a re­mark­able job of van­ish­ing from pub­lic life.

The fam­ily owns OxyCon­tin maker Pur­due Pharma, which filed for bank­ruptcy this week as part of an ef­fort to set­tle about 2,600 law­suits ac­cus­ing it of help­ing spark the na­tional opioid cri­sis that has killed more than 400,000 peo­ple in the U.S. in the last two decades.

Any set­tle­ment deal is likely to take a cut of their fu­ture in­come, and some states have sought to go af­ter the Sack­lers’ wealth, much of which has moved through a com­plex chain of com­pa­nies and trusts in off­shore tax havens. In a fil­ing Wed­nes­day, Pur­due asked a bank­ruptcy court to halt all lit­i­ga­tion against fam­ily mem­bers as well as the com­pany.

The rel­a­tives have rarely spo­ken pub­licly in re­cent years and did not show up to the first bank­ruptcy hear­ing this week, in White Plains, New York. Here are some ba­sic facts about the fam­ily:

Own­er­ship

Broth­ers Mor­timer, Ray­mond and Arthur Sack­ler — all physi­cians — bought the drug com­pany known as Pur­due Fred­er­ick in 1952. They are all dead, but their wi­d­ows, chil­dren and grand­chil­dren now own the com­pany, along with an in­ter­na­tional drug com­pany, Mundipharm­a.

Pur­due is pri­vately held, and its board has been mainly con­trolled by Sack­ler heirs over the years, un­til le­gal is­sues be­gan pil­ing up in the last year. No fam­ily mem­bers are cur­rently on the board.

In court fil­ings, lawyers for fam­ily mem­bers have ar­gued that their clients, serv­ing as com­pany di­rec­tors, were not heav­ily in­volved in day-to-day de­ci­sions at the com­pany.

Arthur Sack­ler

Arthur Sack­ler be­came a force in the drug in­dus­try sep­a­rate from Pur­due. In ad­di­tion to his med­i­cal back­ground, he worked in ad­ver­tis­ing and de­signed cam­paigns aimed at doc­tors for block­buster drugs such as Val­ium.

In 1997, Sack­ler was posthu­mously placed in the Med­i­cal Ad­ver­tis­ing Hall of Fame, where the ci­ta­tion about him says that he “helped shape phar­ma­ceu­ti­cal pro­mo­tion as we know it to­day.”

But Arthur Sack­ler died years be­fore OxyCon­tin hit the mar­ket. And states that have filed law­suits against mem­bers of the fam­ily have not named his heirs. Arthur Sack­ler’s widow, Jillian Sack­ler, a ma­jor donor, has told in­sti­tu­tions that her hus­band’s money did not come from OxyCon­tin.

“Sug­ges­tions that his phi­lan­thropy is now some­how tainted are sim­ply false,” she wrote ear­lier this year in a Wash­ing­ton Post opin­ion piece.

Ray­mond Sack­ler

Ray­mond Sack­ler’s son Richard, who now lives in Florida, was an ex­ec­u­tive at Pur­due when OxyCon­tin launched in 1996 and later be­came CEO of the com­pany.

Plain­tiffs in the law­suits have seized on his words, es­pe­cially his re­marks to the com­pany sales force at a 1996 launch party for OxyCon­tin held just af­ter a ma­jor snow­storm. He said the launch of the tablets would “be fol­lowed by a bliz­zard of pre­scrip­tions that will bury the com­pe­ti­tion. The pre­scrip­tion bliz­zard will be so deep, dense and white.”

The drug did be­come a block­buster, though generic opi­oids were pre­scribed far more of­ten. Still, state and lo­cal gov­ern­ments that are su­ing the com­pany as­sert that mar­ket­ing by Pur­due opened the door to wider use of pre­scrip­tion opi­oids.

Richard Sack­ler wrote in a 1999 email cited in court fil­ings, “You won’t believe how com­mit­ted I am to make OxyCon­tin a huge suc­cess. It is al­most that I ded­i­cated my life to it.”

In a 2015 de­po­si­tion, he tried to es­ti­mate how much the fam­ily had made from OxyCon­tin. He said it was over $1 bil­lion but less than $10 bil­lion. In a video of the de­po­si­tion that emerged in Au­gust, he was asked if he be­lieved OxyCon­tin was mar­keted too ag­gres­sively. He an­swered with a sin­gle word — “no” — while barely glanc­ing up from pa­pers he was look­ing through.

Rep­re­sen­ta­tives for Ray­mond Sack­ler’s branch of the fam­ily did not re­spond to in­ter­view re­quests.

Mor­timer Sack­ler

At the end of his life, Mor­timer Sack­ler lived in Lon­don. His widow, Theresa, who lives in Eng­land, and chil­dren Mor­timer D.A. Sack­ler, Kathe Sack­ler and Ilene Sack­ler Le­f­court are all for­mer board mem­bers and are named in law­suits.

Mor­timer D.A. Sack­ler and Kathe Sack­ler were also Pur­due ex­ec­u­tives.

In an April 1 de­po­si­tion, Kathe Sack­ler was asked about an email at­trib­uted to her that con­cluded, “PS, I will stren­u­ously protest ap­proval of any doc­u­ment that sug­gests or im­plies, as this draft does, that Richard Sack­ler was re­spon­si­ble for the idea of de­vel­op­ing a con­trolled-re­lease oxy­codone prod­uct. As you know, when I told Richard of my idea in the mid ’80s, he asked me what oxy­codone was.”

In ques­tion­ing un­der oath, though, she said she did not re­mem­ber writ­ing that and that it would have been un­char­ac­ter­is­tic of her to do so.

Rep­re­sen­ta­tives of Mor­timer Sack­ler’s branch of the fam­ily did not re­spond to in­ter­view re­quests.

The money

In 2016, Forbes mag­a­zine listed the Sack­lers as one of the 20 wealth­i­est fam­i­lies in the U.S. and tal­lied their hold­ings at $13 bil­lion.

For decades, the fam­ily mem­bers have been ma­jor phil­an­thropic donors. In the 1970s, they un­der­wrote the Met­ro­pol­i­tan Mu­seum of Art wing that houses an an­cient Egyp­tian tem­ple and bears the Sack­ler name.

This year, in­sti­tu­tions in­clud­ing the Met, Bri­tain’s Tate mu­se­ums, New York’s Guggen­heim and Tufts Univer­sity, where the grad­u­ate school of biomed­i­cal sci­ences also bears the fam­ily’s name, have an­nounced they will stop tak­ing gifts from the fam­ily or re-eval­u­ate the re­la­tion­ship. The Lou­vre Mu­seum in Paris took the Sack­ler name off a wing.

In le­gal fil­ings, states have con­tended that the heirs of Mor­timer and Ray­mond Sack­ler have ac­cepted pay­ments of at least $4 bil­lion over the last dozen years.

Ari­zona’s at­tor­ney gen­eral has asked the U.S. Supreme Court to force the fam­ily to re­turn some money to Pur­due so it could be fair game in law­suits against the com­pany. New York’s at­tor­ney gen­eral has re­quested fi­nan­cial records of en­ti­ties con­nected to the fam­ily to try to trace the money. Her of­fice said in a le­gal fil­ing this month that it found $1 bil­lion trans­ferred to the fam­ily through Swiss banks and other se­cret ac­counts.

FRANK FRANKLIN II/AP

At­tor­neys gen­eral from two states are in­ves­ti­gat­ing money trans­fers from Pur­due Pharma, above, to the Sack­lers.

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