Sacklers deny personal responsibility for opioid epidemic in House hearing

Washington, DC, United States of America

Members of Congress on Thursday hurled withering comments and furious questions at two members of the billionaire Sackler family that owns Purdue Pharma, the maker of OxyContin, seeking to use a rare public appearance to extract admissions of personal responsibility for the deadly opioid epidemic as well as details about $10 billion that records show the family withdrew from the company.

The hearing, before the House Oversight Committee, offered a highly unusual opportunity for the public to hear directly from some members of the family, whose company is a defendant in thousands of federal and state lawsuits for misleading marketing of OxyContin, the painkiller seen as initiating a wave of opioid addiction that has led to the deaths of more than 450,000 Americans. Eight members of the family have been individually named in many state cases.

The singularity of the Sacklers’ appearance on Thursday was underscored by the likelihood that they may never testify in open court, because the ongoing bankruptcy proceedings and nationwide litigation may resolve in settlements rather than trials. Despite millions of dollars in legal expenses racked up by plaintiffs and Purdue alike — and the company’s subsequent filing for Chapter 11 bankruptcy protection in September 2019 — one obstacle to resolution persists: the refusal of the Sacklers to be held personally or criminally responsible and to turn over substantial portions of their fortune.

During the tense, nearly four-hour hearing, David Sackler, 40, and his cousin, Kathe Sackler, 72, who both served on the company’s board for years, testified remotely and largely sidestepped would-be booby traps and deflected blame to “management” and independent, nonfamily board members.

Or, as David Sackler said, “That’s a question for the lawyers.”

Repeatedly, the committee members pitted hard statistics about the destruction from the epidemic against images of the family’s concurrent gains, including a $22.5 million mansion in the Bel Air neighborhood of Los Angeles, paid for in cash in 2018 — which David Sackler characterized as a trust investment in which he had not spent a single night.

Throughout the session, both Sacklers voiced regret for the role of OxyContin in the epidemic, but not for their own actions during the years that the company, with the board’s oversight and encouragement, aggressively promoted the painkiller.

Indeed Kathe Sackler cast herself as scrupulously concerned about the well-being of patients. “I thought Purdue was acting responsibly to reduce the incidence of abuse and overdose while still serving those in need of pain relief,” she said.

“I have tried to figure out, was there anything that I could have done differently? Knowing what I knew then — not what I know now?” said Kathe Sackler, who served on the board from 1990 to 2018. “There’s nothing that I can find that I would have done differently based on what I believed and understood then.”

She said that what she subsequently learned from management and reports to the board was “extremely distressing.”

David Sackler, who served on the board from 2012 to 2018, echoed a similar sensibility: “I believe I conducted myself legally and ethically and I believe the full record will demonstrate that I still feel absolutely terrible that a product created to help so many people” is associated with death and addiction, he said.

Deeply skeptical committee members asked the Sacklers whether, in fact, they subscribed to newspapers or had access to cable television.

Addressing the Sacklers, Rep. Jim Cooper, D-Tenn., said: “Watching you testify makes my blood boil. I’m not aware of any family in America that is more evil than yours.”

Rep. Carol Miller, R-W.V., asked David Sackler whether he had ever visited Appalachia to see the impact of the crisis firsthand.

“Yes,” he replied, though not with the express purpose of fact-finding.

“I visited with my wife for a vacation,” he said.

In the absence of direct admissions of responsibility by the Sacklers — or by Craig Landau, Purdue’s CEO since 2017, who also testified — committee members used their questions to highlight the most egregious actions over the years by the company and by David Sackler’s father, Richard Sackler, a hands-on executive during the cresting period of the epidemic.

In particular, they explored the actions that followed a 2007 federal fine of nearly $635 million that the company and three executives paid after pleading guilty to federal criminal charges of “misbranding.” The settlement included no admission of liability by any of the Sacklers.

The committee chairwoman, Rep. Carolyn Maloney, D-N.Y., asked David Sackler whether in 2008, after the company’s federal settlement, the family was concerned about state investigations. David Sackler denied knowing that investigations had been mounting.

But then Maloney read from an email exchange between David Sackler and other relatives in 2007, just a week after that settlement. Referring to courtroom activity, he wrote: “We’re rich? For how long? Until which suits get through to the family?”

She then asked David Sackler: “Were you trying to cash out profit so that opioid victims couldn’t claim them in future losses?”

He replied, “No, I don’t believe that’s what I meant then.”

The committee was able to elicit a commitment from the Sacklers to turn over a list of what Maloney characterized as “offshore shell companies.” According to court documents, between 2008 through 2017, the family withdrew approximately $10 billion from Purdue Pharma.

David Sackler said Thursday that the family had paid about half that amount in taxes.

Landau said that under his tenure, the company has halted its promotion of opioids and has turned its focus toward 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, Arthur Sackler, sold his shares long before OxyContin was introduced.) During the opioid epidemic, family members served as Purdue board members, and often took a vigorous hands-on approach in urging the sales department to swarm high-prescribing doctors and downplay the addictive properties of the medication, according to extensive court documents.

Last month, Purdue pleaded guilty to three felonies involving kickbacks and fraud related to promotion of its opioid and failure to report aberrant sales. The Justice Department settled with the company for $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 represents about 2% of the family’s net worth.

Maura Healey, attorney general for Massachusetts, the first state to name individual Sacklers in litigation, said that the Sacklers want “special treatment.” In a letter to the House committee, she wrote, “If we let powerful people cover up the facts, avoid accountability, or create a government-sponsored OxyContin business — that’s not justice. This time, we have to get it right.”

In 2019, congressman Elijah E. Cummings, the now-deceased committee chairman, initiated an investigation into the company and the family to examine whether their actions should lead to potential policy or legislative changes. In October, the committee released a trove of documents, underscoring how individual Sacklers urged the company to rev up sales. The committee sought to bring in numerous Sacklers to testify, which, through their lawyers, they refused to do, saying that the appearances would impede ongoing bankruptcy proceedings.

Committee lawyers threatened to issue subpoenas. After considerable wrangling, the Sacklers agreed to present two of the four family members originally requested.