Reuters
ReutersNEW YORK (Reuters Breakingviews) - Isaac Sackler left his three sons close to nothing “apart from their good name”. A new book examines how his descendants repeatedly used harmful tactics to push addictive drugs and build a fortune worth over $10 billion, while largely escaping serious sanction. The only damage to the clan has been to its reputation.
Purdue Pharma, the company owned by the Sacklers, set in motion an opioid epidemic when it introduced OxyContin in 1995. Since then nearly half a million Americans have died of overdoses. Yet the first third of “Empire of Pain: The Secret History of the Sackler Dynasty” somewhat curiously focuses on Arthur Sackler, who died in 1987, and whose heirs sold their Purdue stake to brothers Mortimer and Raymond for $22 million. Though that’s too long of a detour, Patrick Radden Keefe convincingly lays out how the older brother created the family playbook of aggressive marketing, secrecy, regulatory capture and philanthropy.
While Arthur Sackler trained as a doctor, he made his mark as an entrepreneur. His firm, along with another he secretly owned, pioneered and dominated drug advertising. A deal with the Swiss giant Roche put him in charge of marketing Valium, with rising fees for increased sales. The resulting ads pitched the tranquilizer for nearly any ill, helping create the first $100 million drug.
Regulators proved equally pliable. The head of the U.S. Food and Drug Administration’s antibiotics arm edited a journal silently bankrolled by Arthur Sackler in exchange for a cut of the advertising revenue. And while few knew how the entrepreneur made his money, he wasn’t shy of plastering the family name on museums in exchange for donations. Even today, visitors to New York’s Metropolitan Museum of Art can admire an Egyptian temple in the Sackler Wing.
The family’s two other branches used the same formula to extract far higher rewards. Purdue was originally a minor pharmaceutical firm which concentrated on selling items like laxatives and ear wax remover. But the development of a delayed-release opioid unlocked far greater riches.
In the early 1990s, doctors realized many patients weren’t being treated adequately for pain, because of the fear they would become addicted to the treatment. Purdue stepped in, helped by the perception, heavily promoted by the company, that OxyContin was safer.
The FDA allowed the company to say the drug’s coating was “believed” to reduce abuse. It didn’t, but about a year later Purdue hired the head regulator on a salary of roughly $400,000. Salespeople with limitless bonus potential were instructed to say patients could use the drug for a lifetime and make the patently false claim that fewer than 1% became addicted. Doctors who wrote lots of prescriptions received junkets to “pain seminars” in sunny resorts.
The resulting damage eventually caught up with Purdue. Lawyers at the U.S. Department of Justice uncovered evidence that the company knew OxyContin was addictive, that it was being marketed deceptively, that a large chunk of its sales were to addicts, and that executives had lied to Congress. Yet Purdue escaped with a relative slap on the wrist. Three executives, none of them family members, were charged with misdemeanors and the company paid a $600 million fine. Purdue and the Sacklers showed little remorse. Soon afterward the company gave multimillion payments to two of the charged executives, expanded its salesforce, and returned to the same behavior.
Smaller settlements became a cost of doing business. Purdue would pay a fine, not admit guilt, and make sure the evidence was sealed, making it difficult for other claimants or the public to piece together the bigger picture. Meanwhile, the Sacklers started extracting far more money from the company. When a cavalcade of lawsuits eventually caught up with Purdue, the courts were ill prepared to deal with the result. The company was relatively poor, and the families’ wealth stashed in multiple trusts, many of them offshore.
In 2019 Purdue declared bankruptcy. Its settlement offer was to run the company as a trust, distributing earnings from the sale of drugs, including opioids. The Sacklers have offered up to $4.3 billion, paid over years, to help settle about 3,000 lawsuits and release them from legal liabilities. Though that sounds generous, documents released by a congressional committee on Tuesday show family members that own the firm are worth about $11 billion. However, the proposed settlement might be enough to win over cash-desperate plaintiffs and a court hoping for a relatively speedy resolution.
The irony is that while regulators and the justice system have largely failed the public, museums, colleges and non-profit organizations have extracted a measure of retribution. The Louvre Museum in Paris, Tufts University and others have removed the Sackler name from various buildings, creating a cascade of bad publicity. The Sackler families probably will bequeath vast wealth to their descendants, but they won’t leave a good name.
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CONTEXT NEWS
- “Empire of Pain: The Secret History of the Sackler Dynasty” by Patrick Radden Keefe was published by Doubleday on April 13.
- For previous columns by the author, Reuters customers can click on [CYRAN/]
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