Purdue Pharma Conducted Massive Probe Of The Sackler Family, But The Findings Are Secret

BY BRIAN MANN

Purdue Pharma, the maker of Oxycontin, conducted what may be the most extensive investigation yet of the Sackler family, exploring whether they committed crimes or financial improprieties, but the company has kept most of its findings secret.

In a bankruptcy filing late Monday, the drugmaker acknowledged hiring attorneys, forensic accountants and other financial experts to probe members of the family who own the company and profited billions from opioid sales.

According to the filing, the team searched for evidence of wrongdoing by the family, reporting to a special committee of Purdue’s board between April 2019 and earlier this month.

Yet in its filing, Purdue Pharma chose to reveal almost nothing of what investigators uncovered, a decision that infuriates opioid activists and some government officials.

“They’re still trying to cover up the facts,” said Massachusetts Attorney General Maura Healey, who has sued the company and it owners, in a statement.

Purdue Pharma headquarters in Stamford, Conn., in 2019. Purdue Pharma, the maker of OxyContin, and its owners, the Sackler family, have faced hundreds of lawsuits over the company’s alleged role in the opioid epidemic that has killed more than 200,000 Americans.
CREDIT: Drew Angerer/Getty Images

“Purdue’s disclosure filing says it paid its lawyers for a 22,000-hour investigation of the Sacklers, but it doesn’t disclose any of their findings,” she added.

Members of the Sackler family have long denied any wrongdoing.

According to Purdue Pharma’s description of the probe, investigators were given unprecedented access to “over 21 million” internal company documents, including private emails and other correspondence between the company’s top executives.

They were also able to take part in depositions when members of the Sackler family were questioned.

Experts said the investigation appears to be the most sweeping effort yet to explore the Sacklers’ alleged liability for the opioid epidemic, which has killed roughly 450,000 Americans.

Healey said Purdue Pharma has an obligation to release all documents and reports produced by the probe — not least because it was paid for with money owed to people harmed by company.

“Purdue’s creditors paid tens of millions of dollars for that investigation,” she said. “But the public can’t see what the investigators learned.”

Purdue Pharma declined to answer NPR’s questions about the probe or the decision to keep most of its findings secret.

Sources speaking on behalf of the Sacklers downplayed the significance of the investigation and again maintained the family did nothing wrong.

“As we have said before, we support the release of documents and they will continue to show Sackler family members who served on Purdue’s board acted ethically and legally,” said Daniel S. Connolly, attorney for the Raymond Sackler family.

The Purdue Pharma document filed in a federal court in White Plains, N.Y., suggests the main goal of the investigation was to inform and shape bankruptcy talks still underway.

But the team also strove to resolve lingering questions about the Sacklers’ conduct that have vexed the public and government officials:

• What role if any did the family play in Purdue Pharma’s admitted criminal acts?
• Did the Sacklers dominate Purdue Pharma’s internal decision-making as many have claimed?
• Did members of the family act improperly or illegally to shelter billions of dollars in opioid profits from lawsuits and injury claims?
• If so, could any of those assets be recovered?

“What is absolutely devastating about this disclosure document is that it dangles before us all the questions that the public may never see answered,” said Charlotte Bismuth, a former prosecutor and now an opioid activist.

“These are questions that hundreds of thousands of families across America have been tortured by over the last couple of decades because they’ve lost a loved one and they want to know why,” she added.

But experts interviewed by NPR said the bankruptcy document filed by Purdue Pharma did offer tantalizing clues about what investigators found.

The filing states the team uncovered evidence that “certain dealings between Purdue Pharma and the Sackler families and various Sackler entities were not conducted on arm’s-length terms.”

In separate documents filed this week, Purdue Pharma also disclosed the Sacklers’ total cash withdrawals from the company totaled roughly $10.3 billion from 2008 through 2017.

Company investigators also found Purdue Pharma “transferred significant value” in non-cash assets to the Sacklers’ other companies and private holdings. The exact nature of the assets transferred and their total value weren’t disclosed.

Those named in Purdue’s disclosure documents as receiving compensation from the firm include Dr. Kathe Sackler, Mortimer Sackler, Richard Sackler, David Sackler, Jonathan Sackler and Raymond Sackler, among others.

According to Purdue Pharma’s filing, the Sacklers agreed in January to boost their settlement offer by roughly a billion dollars. It’s unclear whether the investigation or its findings played any role in their decision.

Speaking on background, a source familiar with the situation asserted to NPR that family-members were not privy to the probe’s findings.

Under the bankruptcy settlement now on the table Sackler family-members would give up ownership of the firm and pay a total of $4.2 billion from their private wealth in installments over the next decade.

The Sacklers have described the offer as a significant financial sacrifice. But they will again admit no wrongdoing and will remain one of the wealthiest dynasties in the country.

The deal would also shelter them from future lawsuits related to their role at Purdue Pharma.

Many lawmakers, including Rep. Carolyn Maloney of New York, have called for far more of the Sacklers’ assets to be “clawed back” during the bankruptcy process and used to help communities ravaged by the opioid crisis.

“You and your family should compensate the American people for the harm you’ve caused and you should be held fully accountable for your actions,” Maloney said during a hearing of the House oversight committee she chairs in December.

In his testimony before Maloney’s panel, former Purdue board member David Sackler again denied wrongdoing and said the family’s financial dealings had been “appropriate, documented and disclosed.”

Only a few years ago, the Sacklers were viewed as one of the most respected families in America, ranking among the world’s top philanthropists.

Their reputation has been shattered by disclosures of internal Purdue Pharma documents showing some members of the family pushed aggressively to boost Oxycontin sales long after overdoses and deaths linked to the painkiller skyrocketed.

Institutions ranging from Tufts University to the Louvre have stripped the Sackler family name from buildings.

The company has now admitted twice to illegally marketing Oxycontin in plea deals with the U.S. Justice Department, first in 2007 and again last year.

While declining to bring criminal charges, the DOJ accused the Sacklers of making “fraudulent transfers” in order to “hinder future creditors.”

In 2019, facing an avalanche of opioid-related lawsuits, the Sacklers’ privately held company filed for bankruptcy.

Throughout, Sacklers involved in the company have maintained they acted ethically and were unaware of wrongdoing.

One legal question that now remains is whether Purdue Pharma has disclosed enough information about the Sacklers’ conduct and finances to allow parties involved in the bankruptcy proceeding to assess the deal now on the table.

Attorneys will argue that point before federal bankruptcy Judge Robert Drain next month in White Plains, N.Y.

Critics, meanwhile, point to one final twist in Purdue Pharma’s decision to keep the findings of its Sackler probe secret.

In this week’s bankruptcy filing, the company confirmed it will create a “public document repository” expected to reveal far more detail about the practices of the drug-maker and its owners.

But Purdue Pharma said that trove of internal documents will only be released after a final bankruptcy plan sheltering the Sacklers from future lawsuits has “become final and non-appealable.”

In a statement this week on Twitter, Massachusetts AG Healey wrote, “Purdue says it will show the evidence to the public after the Sacklers get immunity. Huh.”