AP NEWS

Connecticut lawsuit intensifies scrutiny of Purdue Pharma owners

December 28, 2018

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 and several former executives, including two ex-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.”

pschott@scni.com; 203-964-2236; twitter: @paulschott

AP RADIO
Update hourly