March 26, 2019; National Public Radio, New York Times, and the Washington Post
At NPQ we have followed the opioid crisis and its intersection with philanthropy for nearly a year-and-a-half now. The Sackler family, who descend from brothers Raymond and Mortimer, ranked not too long ago as the nation’s 19th-wealthiest, with assets of $13 billion, and have been highly visible philanthropists. But the main source of their wealth has been from sales of the opioid OxyContin, which was produced and marketed by the family-owned firm Purdue Pharma. Martha Bebinger, writing for NPR’s “Shots,” notes that court documents filed in Massachusetts show the Sacklers paid themselves nearly $4.3 billion between 2008 and 2016 alone out of Purdue Pharma earnings.
The impact of the opioid crisis has been enormous, but still bears repeating. The Centers for Disease Control and Prevention (CDC) reports that a record 47,600 people died after an opioid overdose in 2017 and nearly 400,000 since 1999. A total of 218,000 of these deaths, the CDC estimates, are related to prescription opioids. The loss of life in 2017 was five times that of 1999.
In the last week, a concerted campaign by activists, including photographer Nan Goldin, began to move nonprofit institutions to turn down Sackler money. First, it was the National Portrait Gallery in London, then London’s Tate Modern and New York’s Solomon R. Guggenheim Museum quickly followed. The Sackler Trust subsequently indicated that it would suspend all new philanthropic giving to avoid becoming a “distraction” for grant recipients. And now comes the first settlement in the multitude of lawsuits filed against Purdue Pharma, in which the Sacklers, although not named as defendants in the case, are contributing $75 million. (For the record, as is standard in legal settlements of this kind, neither Purdue Pharma nor the Sacklers have admitted responsibility, even as they have agreed to make payments.)
“The first of more than 1,600 lawsuits pending against Purdue Pharma, the maker of the opioid OxyContin, has been settled,” Bebinger reports. Purdue, however, is not the only firm named in those 1,600 lawsuits. Many suits name a wide range of firms, including not just drug manufacturers like Purdue, but also drug distributors and pharmacy companies. Nearly two dozen firms are named as defendants.
Increasingly, too, the Sacklers—namely, the eight Sackler family descendants who have been directors of Purdue Pharma—are also being named as defendants. Indeed, on March 18th, CNN reports, “More than 600 cities, counties and Native American tribes from 28 states…filed a federal lawsuit against eight members of the Sackler family” in federal court in the Southern District of New York.
The overwhelming majority of the 1,600 lawsuits—which include suits filed by cities, counties, states, and many Indian nations—have been consolidated into a single legal proceeding that is in the courtroom of Cleveland, Ohio-based federal judge Dan Polster. Those cases currently have a scheduled trial date of October 21st.
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
The Oklahoma case, however, is separate from the combined litigation and was scheduled to be begin several months earlier, on May 28th. While Purdue has now settled, some defendants still remain, with the main ones being Johnson & Johnson and Teva Pharmaceuticals, so the trial may still occur. The judge in the Oklahoma case has ruled that the trial will be televised, which many speculate was an incentive for Purdue Pharma to settle.
As for the terms of the settlement in Oklahoma, Bebinger reports that Purdue and its owners, the Sackler Family, have “agreed to pay $270 million to fund addiction research and treatment in Oklahoma and pay legal fees.” The state of Oklahoma is home to nearly 4 million people in a country of 328 million. If Purdue were to make similar per capita payments to the other 49 states, the total price tag of a settlement at that rate would exceed $22 billion.
“The settlement comes one day after the Oklahoma Supreme Court denied Purdue’s appeal for a delay of the trial,” Bebinger notes. Oklahoma Attorney General Mike Hunter’s suit sought $20 billion in damages from the multiple defendants.
Settlement funds will primarily go to fund a new National Center for Addiction Studies and Treatment at Oklahoma State University in Tulsa. It will be funded by $102.5 million from Purdue and $75 million from the Sacklers. It will be housed, reports Jan Hoffman at the New York Times, at the university’s Center for Wellness and Recovery and will easily dwarf that center, which reportedly has a current annual budget of only about $2.4 million. The settlement also includes $20 million for medicines to be used by patients in the center, $12.5 million for counties and municipalities in Oklahoma, and $60 million for legal fees.
While the settlement numbers may seem large, they are overshadowed in comparison to the damage done by the opioid epidemic. Larry Bernstein and Katie Zezima of the Washington Post note that, “A consultant’s report that Oklahoma filed in the current case estimated that abating the opioid crisis in that state would cost more than $8.7 billion over the next 20 years.”
Oklahoma’s fear that Purdue Pharma might seek out bankruptcy appears to have led the Sooner State to get what money it could while it can. Hoffman in the Times writes that “the possibility of bankruptcy exerted powerful leverage at the bargaining table.” Mike Hunter, the Oklahoma state attorney general, pointedly noted that Purdue’s payment to the state is secured against any possible bankruptcy filing.
Abbe Gluck, a professor at Yale Law School who directs the Solomon Center for Health Policy and Law, told Hoffman that “the settlement does put a stake in the ground for the other cases. It telegraphs what these cases might be worth and makes the elephant in the room even larger—namely, do Purdue and the Sacklers have sufficient funds to give fair payouts in the 1600-plus cases that remain?”—Steve Dubb