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Sacklers deny personal responsibility for opioid epidemic

Members of Congress heard testimony Thursday from two members of the billionaire Sackler family that owns Purdue Pharma, the makers of OxyContin. Both insisted that while they regretted the role drugs had played in the opioid epidemic, they took no personal responsibility.

You have apologized for the pain people have gone through, but you have never apologized for your role in the opioid crisis. So I’m going to ask you again, will you apologize for the role you played in the opioid crisis? I struggled with this question, I wondered for many years, I tried to figure out, is there anything I could have done differently, knowing what I knew then, not what I know now. And I have to say I can’t. I can’t think of anything that I would have done differently based on what I believed and understood at the time and what I learned from management in reporting to the board, and what I learned from my colleagues on the board. And it is extremely painful. Far too many lives have been destroyed by addiction and abuse of opioids, including OxyContin. Many lawsuits have blamed Perdue and my family for the opioid crisis. While we take no responsibility and vigorously dispute these claims, we want to respond to the opioid crisis because a prescription drug our company made and sold that was never intended to harm anyone has ended up making part of a crisis that has done too much harm. people.

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Sacklers deny personal responsibility for opioid epidemic in home hearing

Members of Congress threw fierce comments and angry questions on Thursday at two members of the billionaire Sackler family who own Purdue Pharma, the maker of OxyContin, seeking to use a rare public appearance to extract confessions of personal responsibility for the deadly opioid epidemic as well as details about $ 10 billion that records show the family has pulled out of the business.

The hearing, before the House Oversight Committee, provided the public with a very unusual opportunity to hear directly from some of the family, whose company is a defendant in thousands of federal and state lawsuits for deceptive marketing of OxyContin. , the painkiller believed to be a wave of opioid addiction that has resulted in the deaths of more than 450,000 Americans. Eight family members have been named individually in many state cases.

The uniqueness of the Sacklers’ appearance on Thursday was underscored by the likelihood that they will never testify in open court, as ongoing bankruptcy proceedings and domestic disputes can be resolved in settlements rather than lawsuits. Despite millions of dollars in legal fees accrued by plaintiffs and Purdue – and the company’s subsequent filing of Chapter 11 bankruptcy protection in September 2019 – a roadblock to resolution persists: The Sacklers’ refusal to be required personally or criminally liable and to return on substantial portions of their fortune.

During the tense, nearly four-hour hearing, David Sackler, 40, and his cousin, Dr. Kathe Sackler, 72, both of whom have served on the company’s board of directors for years, have largely avoided potential pitfalls and placed the blame on “management” and independent, non-family board members.

Or, as Mr. Sackler put it, “That’s a question for lawyers.”

On several occasions, committee members have pitted reliable statistics on the destruction of the epidemic against images of the family’s concurrent earnings, including a $ 22.5 million mansion in the Bel Air neighborhood of Los Angeles. , paid in cash in 2018 – which David Sackler called a trust. investment in which he had not spent a single night.

Throughout the session, both Sacklers expressed regret for OxyContin’s role in the outbreak, but not for their own actions in the years the company, under the guidance and encouragement of the board of directors , aggressively promoted the pain reliever.

Indeed, Dr. Sackler said he was scrupulously concerned about the well-being of patients. “I believed Purdue was acting responsibly to reduce the incidence of abuse and overdose while serving those in need of pain relief,” she said.

“I tried to figure out, was there something I could have done differently? Knowing what I knew then – not what I know now? said Dr Sackler, who served on the board from 1990 to 2018. “There is nothing I could find that I would have done differently based on what I believed and understood at the time.

She said what she subsequently learned from leading and reporting to the board was “extremely distressing.”

Mr Sackler, who served on the board of directors from 2012 to 2018, echoed a similar sensibility: “I believe I have conducted myself in a legal and ethical manner and I believe the full record will show that I feel still absolutely terrible that a product created to help so many “is associated with death and drug addiction,” he said.

Deeply skeptical committee members asked the Sacklers if they actually subscribed to newspapers or had access to cable television.

Speaking to the Sacklers, Rep. Jim Cooper, Democrat of Tennessee, said, “Watching you testify makes my blood boil. I don’t know of any family in America that’s more evil than yours.

Rep. Carol Miller, Republican from West Virginia, asked Mr Sackler if he had ever been to the Appalachians to see firsthand the impact of the crisis.

“Yes,” he replied, but not for the express purpose of finding the facts.

“I visited my wife for vacation,” he says.

With no direct admissions of responsibility from the Sacklers – or Dr Craig Landau, CEO of Purdue since 2017, who also testified – committee members used their questions to highlight the most common actions. glaring over the years of the company and Mr. Sackler’s father, Dr. Richard Sackler, a practical setting during the peak period of the epidemic.

In particular, they explored the actions that followed a federal fine of nearly $ 635 million in 2007 that the company and three executives paid after pleading guilty to federal criminal charges of “bad branding.” The settlement did not include any acknowledgment of liability by any of the Sacklers.

Committee chair, Rep. Carolyn B. Maloney, Democrat of New York, asked Sackler if in 2008, after the company’s federal settlement, the family was concerned about state investigations. Mr. Sackler denied knowing that the investigations were increasing.

But then Ms Maloney read an email exchange between Mr Sackler and other parents in 2007, just a week after that settlement. Referring to the activity in the courtrooms, he wrote: “Are we rich? For how long? Until the costumes get to the family? “

She then asked Mr Sackler, “Have you tried to cash in profits so that opioid victims cannot claim them in future losses?”

He replied, “No, I don’t think that’s what I meant at the time.”

The committee was able to secure a commitment from the Sacklers to hand over a list of what Ms Maloney called “offshore shell companies.” According to court documents, between 2008 and 2017, the family withdrew about $ 10 billion from Purdue Pharma.

Mr Sackler said Thursday the family paid about half of that amount in taxes.

Dr Landau said under his tenure the company halted its promotion of opioids and focused on developing drugs that reverse overdoses.

Three generations of family members have overseen Purdue since the 1950s, when three brothers – including Raymond (David’s grandfather) and Mortimer (Kathe’s father) – founded it. (A third brother, Dr Arthur Sackler, sold his shares long before the introduction of OxyContin.) During the opioid epidemic, family members served on Purdue’s board and often adopted a vigorous hands-on approach to urge the sales department to soar. -prescribing doctors and minimizing the addictive properties of the drug, according to numerous court documents.

Last month, three crimes involving bribery and fraud related to the promotion of its opioids and failure to report aberrant sales. The Department of Justice settled with the company $ 8.3 billion in criminal and civil penalties and family members for $ 225 million in civil penalties. The Sacklers did not admit any wrongdoing. The amount they paid is about 2% of the family’s net worth.

Maura Healey, the attorney general for Massachusetts, the first state to name individual Sacklers in a dispute, said the Sacklers wanted “special treatment.” In a letter to the House committee, she wrote, “If we let powerful people cover up the facts, shirk responsibility, or start a government sponsored OxyContin business, it is not fair. This time we have to do it right.

In 2019, Congressman Elijah E Cummings, the now deceased committee chairman, opened an investigation into the company and family to examine whether their actions should lead to potential political or legislative changes. In October, the committee released a wealth of documents, highlighting how individual Sacklers urged the company to increase sales. The committee sought to get many Sacklers to testify, which they refused, through their lawyers, to argue that the appearances would prevent the ongoing bankruptcy proceedings.

Committee lawyers threatened to issue subpoenas. After much argument, the Sacklers agreed to introduce two of the four family members initially requested.

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Purdue Pharma pleads guilty to its role in the opioid crisis as part of Deal With Justice Dept.

WASHINGTON – Purdue Pharma pleaded guilty on Tuesday to criminal charges for misleading the federal government over sales of its blockbuster pain reliever OxyContin, the prescription opioid that has helped fuel a national drug crisis. The admission formally ended a massive federal investigation that resulted in a multi-billion dollar settlement between the company and the Justice Department.

“The abuse and diversion of prescription opioids has contributed to a national tragedy of drug addiction and death,” Deputy Attorney General Jeffrey A. Rosen said in a statement. “Today’s convictions underscore the ministry’s commitment to its multi-pronged strategy to overcome the opioid crisis.

Purdue chairman Steve Miller admitted in a remote hearing in New Jersey federal court that in order to meet its sales targets, the company falsely told the Drug Enforcement Administration that it had created a program to prevent the sale of OxyContin on the black market. , even though it marketed the drug to more than 100 doctors suspected of illegally prescribing OxyContin.

Purdue also pleaded guilty to paying illegal bribes to doctors who prescribed OxyContin and to an electronic health records company, Practice Fusion, for targeting doctors with alerts intended to increase the rates. opioid prescriptions. Practice Fusion paid $ 145 million in fines for accepting these bribes.

Doctors who prescribe too much OxyContin, along with the illicit distribution of the drug, have contributed to the deaths of more than 450,000 Americans since 1999.

The advocacy ended the federal government’s case against Purdue, who sought bankruptcy protection to handle the wave of litigation he is facing.

The company agreed last month to plead guilty to criminal charges and face criminal and civil penalties of around $ 8.3 billion as part of the settlement with the Justice Department. A federal bankruptcy judge in New York City approved the deal last week.

The settlement included $ 3.54 billion in criminal fines and $ 2 billion in criminal confiscation of profits. The ministry said these were the biggest financial penalties imposed on a pharmaceutical manufacturer.

But the federal government is unlikely to receive the majority of the penalties, given that under its bankruptcy restructuring deal, Purdue will pay other creditors first. In bankruptcy proceedings, creditors usually only get pennies on the dollar for what is owed to them.

The owners of the company, members of the wealthy Sackler family, agreed to pay $ 225 million in civil penalties as part of the settlement, but did not immediately face criminal charges. Sales of OxyContin helped the Sacklers build a fortune estimated at at least $ 13 billion, an amount that dwarfs the fine.

But the settlement agreement does not prevent the federal government from investigating criminal charges against Purdue executives or members of the Sackler family who are involved in the business.

While the settlement gave the Trump administration a leading victory in the war on opioid addiction, Purdue also pushed to sort out his federal legal issues while President Trump was still in office, predicting his officials would conclude. a more generous deal than a new administration. .

Attorneys General in Massachusetts, New York, North Carolina and other states said federal regulations did not do enough to hold the Sackler family to account.

Purdue did “everything he could to make this deal in this administration,” said Joe Rice, a local government negotiator suing Purdue, when the settlement was announced. “It’s beneficial for both parties.”

While the company’s board of directors said last month that it regrets its actions and accepts responsibility “for the Department of Justice’s detailed misconduct,” members of the Sackler family who had served on the board the company’s directors, who could still face legal action, said they had “acted ethically and legally.”

The statement added that these family members “have relied on repeated and consistent assurances from Purdue’s management team that the company meets all legal requirements.”

OxyContin was introduced to the market in the mid-1990s as a miraculous, non-addictive pain reliever. It was incorrect, and as more and more doctors have prescribed, people across the country have become addicted to the drug. The increase in demand created a booming market for illegal prescriptions and pharmacies that were only fronts for OxyContin sales, which also helped fuel a larger plague of illegal opioid addiction. like heroin and fentanyl.

The federal regulations do not end all litigation facing Purdue, nor do they end ongoing investigations and lawsuits related to other drugmakers and distributors accused of fueling the opioid addiction crisis.

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$ 26 billion settlement offer in opioid lawsuits enjoys broad support

Top three drug distributors and one major drugmaker move closer to $ 26 billion deal with state and local governments that would end thousands of lawsuits over corporate role in opioid epidemic , according to people familiar with the negotiations and the company’s new filings. .

The deal is $ 4 billion more than an offer made a year ago, which was rejected by most states and municipalities. A major difference in the latest offering is $ 2 billion for private attorneys who represent cities, counties, and some states.

If the deal is finalized, four of the most prominent defendants in the nationwide litigation giant – McKesson, Cardinal Health, AmerisourceBergen and Johnson & Johnson – would no longer be threatened by future opioid lawsuits from those governments. Other drug manufacturers and national drugstore chains are still facing thousands of cases.

Most of the money in the settlement agreement is intended to help fund treatment and prevention programs in communities ravaged by drug addiction and overdose. From 1999 to 2018, 232,000 Americans died from prescription opioid overdoses, according to the latest figures from the Centers for Disease Control and Prevention. Addiction to painkillers has also triggered an epidemic of abuse of illegal opioids like heroin, contributing to an avalanche of deaths, crime and skyrocketing health care costs.

The pharmaceutical industry liability litigation has been fiercely fought, resulting in a handful of settlements and the filing of bankruptcy by some drugmakers, including Purdue Pharma, which has just reached a settlement of the criminal charges. and federal civilians.

The three distributors announced the broad outlines of their settlement offers in quarterly earnings reports published Tuesday and Thursday. Johnson & Johnson announced its share in a filing last month.

Distributors shipped more than three-quarters of the nation’s opioids to pharmacies, rarely raising red flags even when the quantities were grossly disproportionate to a store’s local population, according to federal data. In 10 years, for example, companies have shipped nearly 21 million prescription pain relievers to two pharmacies four blocks away in a West Virginia town of 2,900 people.

The latest deal is being negotiated in the shadow of two major trials tentatively scheduled for January, which the companies hope to avoid. Unlike last year’s more modest settlement offer, which was wickedly rejected by many states, but mostly lawyers negotiating for thousands of counties, cities and tribes, this offer is widely welcomed.

“The deal is making money for all communities in the United States that suffer from injury insults, first from the opioid epidemic and now with Covid as well,” said Paul J. Hanly , Jr., a lawyer who represents many small governments. , including two New York counties whose jury trial with New York State against these and other defendants is scheduled to begin in January.

Yet lawyers will have to sell the offers to the local governments they represent. “We believe it is in the best interest of these communities to start receiving a payment stream. We have looked at the finances of these companies and believe the numbers are now appropriate, ”said Hanly, who sits on an executive committee of negotiators.

Without this state and local agreement, companies could remain exposed to more opioid-related lawsuits indefinitely – and thus could forgo this agreement.

In the latest settlement offer, distributors agreed to step up their drug watch programs, which have been blasted in hundreds of lawsuits as contributing to the illegal sale of billions of pills.

According to the broad outlines of the plan outlined in this week’s filings, distributors will collectively pay about $ 21 billion over 18 years, with $ 8 billion paid for by McKesson alone.

Johnson & Johnson said it would contribute $ 5 billion, most of it in the first three years. Lawsuits against Johnson & Johnson said the company previously contracted with poppy growers in Tasmania and supplied 65% of the active ingredients of oxycodone sold in the United States. Its subsidiary, Janssen Pharmaceuticals, manufactured its own opioids, which have since been discontinued, and marketed them aggressively to doctors.

The money from the settlement would be used primarily for measures to alleviate the opioid crisis, including treatment programs, and to reimburse local and state governments for expenses related to the epidemic.

Attorneys general contacted for this article declined to comment as the proposal has yet to be finalized. Lawyers familiar with the talks said at least 45 states viewed the conditions positively.

New York has been described as a leader in the negotiations and a supporter of the deal. The excluded states are said to include New Mexico and Washington. Oklahoma is not fully participating as it has already won its case against Johnson & Johnson, although that verdict is under appeal.

But at least one obstacle to the deal suggests how difficult it is to reach consensus. Although the state of West Virginia established itself with distributors years ago, its counties and cities, which have their own lawsuits in federal court, have not. Indeed, a major bench lawsuit against distributors brought by the town of Huntington in West Virginia and neighboring Cabell County is scheduled to begin on January 4.

Senior counsel, Paul T. Farrell, Jr. did not accept the offer. “West Virginia fully supports the national settlement on behalf of all other states,” said Mr. Farrell, who represents many small governments in West Virginia. “It’s just not good enough for us.”

According to distributor performance reports, settlement of cases depends on a critical mass of plaintiffs signing up, although what constitutes an acceptable majority is unclear. It is said that the offer prompts states to sign as many local governments as possible. Without this broad buy-in, companies could remain exposed to more opioid-related lawsuits indefinitely – and therefore could walk away from this deal.

Over the course of nearly two years of talks, the most stubborn sticking points, aside from a net dollar figure, were about how to allocate funds to very different categories of plaintiffs – as well as squads of claimants. ‘private lawyers.

As part of the deal, each state would determine how it would distribute the settlement money. How much each state would receive would have to be determined by four factors: state population, overdose deaths, diagnoses of substance use disorders, and volume of tablets sold.

Reaching an agreement on compensation for lawyers was also a thorny issue. Cities and counties have relied on hundreds of private attorneys, who have worked on the litigation for years on a contingency basis and have already faced hundreds of millions of dollars in expenses.

Many states have also used outside advice to supplement their own staff.

Sometimes the same lawyers who represent local governments also worked for states. Local governments and states have often had contentious relationships during negotiations.

The $ 2 billion for lawyers is expected to be paid over seven years.

Characterizing the biggest difference between the deal proposed a year ago and the latter, one person familiar with the negotiations said: “There is more money for governments that have helped their citizens but a lot more money. for lawyers. “