The Sacklers Want Immunity From The Opioid Crisis For A Long List Of Their Associates

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David and Kathe Sackler, members of the family that owns Purdue Pharma, the maker of OxyContin, testified via video to a House Oversight Committee hearing on Dec. 17, 2020. Sackler family members have acknowledged that the drug had a role in the opioid crisis, but they have stopped short of apologizing or admitting wrongdoing.

House Television via AP

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House Television via AP

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This demand by the Sacklers for a legal firewall surrounding themselves and their sprawling network has emerged as a flashpoint in the federal bankruptcy trial now underway in White Plains, N.Y.

«We need a release [from liability] that is sufficient to get our goals accomplished, testified David Sackler, one of Purdue Pharma’s owners and a board member until 2018.

According to Sackler, who has denied wrongdoing linked to the opioid crisis, his family will contribute roughly $4.3 billion to Purdue Pharma’s bankruptcy settlement.

But Sackler indicated they will only make the payments if they and their associates receive «global peace from liability for a public health crisis that has killed more than 500,000 people in the U.S. alone.

«If the release fails to do that, we will not support it, he said.

If this deal is finalized it will likely never be known what role the various Sackler associates played or why they might desire legal immunity.

The list is so expansive it includes catch-all groups of «entities and «individuals, not identified by name.

The Purdue Pharma bankruptcy could leave a clean slate for the Sackler empire

Purdue Pharma’s aggressive and at times illegal marketing of OxyContin, a prescription pain medicine introduced in the late 1990s, is widely seen as a major spur of the opioid epidemic.

Facing a tsunami of lawsuits linked to the medication, the Sacklers’ privately owned company filed for Chapter 11 protection in 2019.

Members of the Sackler family have said repeatedly they did nothing unlawful or unethical and were unaware of any wrongdoing by Purdue Pharma executives. The Sacklers have never been charged with any crimes.

Much has been written about the fact that if this deal is finalized, members of the family will walk away from the opioid epidemic with a clean legal slate, and will retain much of their personal wealth. None of the Sacklers have filed for bankruptcy.

Far less is known about the other individuals and entities that would also be sheltered from opioid lawsuits under the deal.

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Purdue Pharma executive Jon Lowne testified last week he was unable to identify those included on the list. «I’m not familiar with all the names of the entities or of the unnamed parties, he said.

Lowne acknowledged it would be difficult for those who say they were harmed by Purdue Pharma’s illegal OxyContin marketing schemes to identify those on the list.

«If I’m not able to, they would not be able to, Lowne said.

Some of the companies and organizations that would be sheltered from opioid lawsuits by this deal are identifiable.

They include wealth management firms such as Beacon Trust; law firms such as Paul Weiss; drug companies such as Bard Pharmaceuticals; public relations firms such Goldin Solutions; and lobbying firms such as Luther Strange & Associates, led by the former Republican senator from Alabama.

Critics of the liability releases point out none of the listed individuals and entities have themselves filed for bankruptcy protection. According to court filings, only the Sacklers are expected to pay money in exchange for immunity.

One federal judge questions the scope of the Sacklers’ demand

Supporters of the bankruptcy plan point to the fact that it would preempt years of costly and uncertain litigation. The deal also creates a network of trusts that would fund drug treatment and health care programs.

In testimony this week, David Sackler said he believed the agreement would help ease the opioid crisis.

«We have a moral responsibility to help and that’s what this settlement will do, he said.

But Judge Robert Drain — who has appeared broadly supportive of the Purdue Pharma settlement — asked pointed questions about the ramifications of blocking potential lawsuits against so many individuals and organizations.

During one exchange, Drain asked whether the bankruptcy deal would have sheltered the consulting giant McKinsey from liability relating to its past involvement with Purdue Pharma and the Sacklers.

McKinsey has publicly apologized for working to help «turbocharge the sale of OxyContin and earlier this year the firm paid $573 million to settle opioid claims.

Garrett Lynam, an attorney for the Sackler family, testified that McKinsey isn’t included on the Sackler family list of released parties. But he said companies performing similar work would likely be sheltered from liability.

«I consider the definitions to be very broad, Lynam said. «I do think an adviser like McKinsey may be picked up.

The settlement would also make it impossible to sue the Sackler family’s privately owned foreign drug companies, which are expected to continue making and marketing opioid products for a period of years after this bankruptcy is finalized.

During another exchange, Drain noted the liability releases appear so broad they might cover alleged wrongdoing which has not yet occurred.

«If an affiliated company sells an opioid in the future, is this intended to cover that company when there’s a claim against it? Drain asked.

The Sacklers deny any wrongdoing, and say they want «global peace

Purdue Pharma has pleaded guilty twice to federal criminal charges related to its opioid practices, in 2007 and again last year.

The Justice Department also alleged in 2020 that the Sacklers committed «fraudulent transfers of their wealth as part of a scheme to «hinder future creditors.

The Sacklers settled those allegations last year with a $225 million payment to the DOJ and again denied any wrongdoing.

Asked why the scope of legal immunity demanded by the Sacklers is so broad, an attorney for the family testified it was necessary for the family to continue operating its remaining empire.

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«I would be concerned that people wouldn’t want to work with the Sackler family, Lynam said. «I need to recommend a deal that has global peace.

During the bankruptcy trial some of the most skeptical questions about the liability releases have come from Justice Department attorneys.

Two departments of the DOJ have filed legal briefs with the court condemning this provision of the bankruptcy deal on constitutional grounds.

If this plan is approved, they argue, people with potential claims against the Sacklers or others would lose their right to due process without proper legal review or compensation.

Despite those concerns, Judge Drain is widely expected to approve the broad structure of Purdue Pharma’s bankruptcy plan.

Drain has authority modify the settlement and could shorten the list of Sackler associates released from liability or narrow their legal protections.

But during testimony this week, David Sackler said his family would walk away from the deal if their demands for broad legal immunity aren’t met.

«It would result in a litigation posture, Sackler said. «We would litigate the claims to the final outcome.

Page 476 of Purdue Pharma Disclosure Statement