New York Sues Sackler Family Members and Drug Distributors

As investigators closed in on Purdue Pharma, the maker of the opioid painkiller OxyContin, more than a decade ago, members of the family that owns the company began methodically erasing a paper trail of profits and shifting hundreds of millions of dollars from the business to themselves through offshore entities, the state of New York alleged in a lawsuit on Thursday.

The legal complaint, released at a news conference by the state attorney general Letitia James, was heavily redacted. Even so, it contains striking details alleging systematic fraud not only by the Sacklers but by a group of large but lesser-known companies that distributed alarming amounts of prescription painkillers amid a rising epidemic of abuse that has killed hundreds of thousands of people nationwide.

The major pharmaceutical distributors — Cardinal Health, McKesson and Amerisource Bergen — warned pharmacies when their monthly opioid limits were approaching, then helped them manipulate the timing and volume of orders to circumvent the limits, the complaint charged. On the rare occasion when a distributor would conduct “surprise” audits of its customers, it would often alert them in advance, the complaint says.

Over the past two decades, more than 200,000 people have died in the United States from overdoses involving prescription opioids, according to the Centers for Disease Control and Prevention. About 200,000 more have died from overdoses involving illegal opioids, like heroin.

In New York State, where prescriptions for opioids increased ninefold between 2000 and 2011, opioid-related deaths have more than doubled since 2013, the lawsuit said. Nine New Yorkers die each day.

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The suit, filed in New York State Supreme Court in Suffolk County, names eight Sacklers: Richard, Jonathan, Mortimer, Kathe, David, Beverly and Theresa Sackler, as well as Ilene Sackler Lefcourt. It seeks to claw back funds that it alleges were transferred from Purdue Pharma to private or offshore accounts held by family members in an effort to shield the assets from litigation; to order the Sacklers to return any transferred assets; and to restrain them from disposing of any property.

A spokesman for the Sackler family called the allegations “a misguided attempt to place blame where it does not belong for a complex public health crisis. We strongly deny these allegations, which are inconsistent with the factual record, and will vigorously defend against them.”

A spokesman for Purdue Pharma said the company and its former directors “vigorously deny” the charges set forth in the complaint, and will defend themselves against the “misleading allegations.”

The Sacklers are one of the richest families in the United States, known for their generous philanthropy in the arts. But they have come under increasing scrutiny after new documents came to light in a Massachusetts case suggesting that some family members helped direct misleading marketing efforts for OxyContin and ignored evidence that the drug was being abused. Over the past several weeks, a number of cultural institutions in the United States and abroad have said they will no longer accept the family’s money.

The New York lawsuit alleges that Sackler family members abolished quarterly reports, insisted that numbers be recounted only orally to board members, and voted to pay themselves millions of dollars, often through offshore companies.

It further charges that in 2007, while Purdue was being investigated by federal prosecutors, the family created a new company to sell opioids, called Rhodes, which a former Purdue official said was specifically set up as a “landing pad” for the Sacklers because of the crisis surrounding OxyContin, according to the lawsuit.

New York vs. Purdue Pharma, Sackler family company owners, distributors et al.

The lawsuit details methods allegedly used to flood the market with Oxycontin.

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