Family behind Purdue Pharma faces congressional scrutiny

The hearing comes after Purdue pleaded guilty to three criminal charges as part of a settlement with the Justice Department.

Bottles of prescription painkiller OxyContin pills, made by Purdue Pharma LP [File: George Frey/Reuters]
Bottles of prescription painkiller OxyContin pills, made by Purdue Pharma LP [File: George Frey/Reuters]

Members of the family who own OxyContin maker Purdue Pharma made a rare appearance on Thursday in a public forum, answering questions from a congressional panel about their role in the nation’s long-running opioid addiction crisis.

Kathe Sackler and David Sackler, descendants of two of the three brothers who bought Purdue nearly 70 years ago, had agreed to appear before the US House Oversight Committee in a video hearing held amid coronavirus restrictions.

They took the step after the committee’s chairwoman, Democratic Representative Carolyn Maloney of New York, threatened to issue subpoenas. Purdue CEO Craig Landau also agreed to testify.

The hearing comes three weeks after Purdue pleaded guilty to three criminal charges as part of a sweeping settlement with the US Department of Justice.

Purdue Pharma headquarters in Stamford, Connecticut [File: Mark Lennihan/AP Photo]

The company agreed to pay more than $8bn in forfeitures and penalties, while members of the Sackler family would have to pay $225m to the government. No family member would be criminally prosecuted under the Justice Department settlement, although the deal leaves open that possibility.

The settlement requires the company to hand over just $225m of the $8bn total to the government as long as Purdue makes good on plans to settle thousands of lawsuits filed by state and local governments, a matter that is now in bankruptcy court. State and local governments blame the company’s marketing efforts for contributing to an opioid addiction and overdose crisis that has been linked to 470,000 deaths in the US over the past 20 years.

The Stamford, Connecticut-based company and the Sacklers have proposed resolving the lawsuits by transforming Purdue into a public benefit corporation, with its profits used to combat the opioid epidemic.

Some members of Congress and attorneys general for about half the states oppose that plan, which includes a requirement for Sackler family members to pay at least $3bn in addition to giving up control of the company. Court documents show they have received more than $12bn from Purdue since OxyContin was released. A third branch of the family sold their stake in the company before the blockbuster painkiller was developed in the 1990s.

Massachusetts Attorney General Maura Healey said in a statement to the committee that the proposed punishment is not enough [Steven Senne/AP Photo]

Massachusetts Attorney General Maura Healey, a Democrat, said in a statement to the committee that the proposed punishment is not enough, especially since the company was fined in 2007 for similar crimes.

“It asked Purdue and the Sacklers to pay another fine. DOJ asked the Sacklers to pay back less than 2% of their reported wealth. No individual was charged, or put on trial, or sent to prison,” Healey said. “That is not good enough.”

Charlotte Bismuth, a former assistant district attorney in Manhattan who is now an author and anti-opioid activist, said she is hoping the House Oversight Committee will ask whether the Sacklers’ lawyers had special access to the Justice Department lawyers, and if so whether that helped them get a better deal.

In a letter to the Oversight Committee this week, Temple University law professor Jonathan Lipson said the committee should push for family members to contribute more through the bankruptcy process.

“Purdue’s reorganization may be beneficial in certain ways,” he wrote, “but any reorganization plan that exonerates the Sacklers without meaningful public scrutiny of, and accountability for, their actions would be a slap in the faces of thousands of victims of the opioid crisis and a misuse of the chapter 11 system.”

Source: AP

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