Purdue paid out $10.4 billion to Sackler family as opioid crisis grew
- Purdue on its bankruptcyA financial analysis finds the Sackler family withdrew $10.4 billion from Purdue Pharma during the last decade.
- The withdrawals and payments came as Purdue's OxyContin was fueling an opioid epidemic.
- The report will likely fuel calls for financial reparations from the Sackler family from states and cities coping with the opioid crisis.
The Sackler family withdraw about $10.4 billion from Purdue Pharma and its affiliated businesses since 2008, a year after the company pleaded guilty for misleading doctors and patients about the addictiveness of OxyContin.
The report, by consulting firm AlixPartners, tracks how money flowed between Purdue and other related businesses to members of the Sackler family. The amount includes $4.1 billion in cash distributions and $4.7 billion to pay for taxes. Family members also received payments for legal expenses, pensions and travel and expenses, according to the report. AlixPartners is advising Purdue on its bankruptcy, according to The Wall Street Journal.
The analysis shows that more transparency is needed about the role the Sacklers played in the epidemic, as well as to determine their financial gains, said New York attorney general Letitia James in a statement to CBS MoneyWatch.
"The fact that the Sackler family removed more than $10 billion when Purdue's OxyContin was directly causing countless addictions, hundreds of thousands of deaths and tearing apart millions of families is further reason that we must see detailed financial records showing how much the Sacklers profited from the nation's deadly opioid epidemic," James said.
An investigation by the Associated Press earlier this year found the Sacklers have shielded their wealth in a web of companies and trusts, some registered in offshore tax havens far from Purdue's corporate headquarters in Connecticut.
An attorney for the Raymond Sackler family said that more than half of the funds were paid in taxes.
"These distribution numbers were known at the time the proposed settlement was agreed to by two dozen attorneys general and thousands of local governments," said attorney Daniel S. Connolly in a statement. "They have been public for months, and this filing reflects the fact that more than half was paid in taxes and reinvested in businesses that will be sold as part of the proposed settlement."
He added, "The Sackler family hopes to reach a productive resolution where they contribute Purdue for the public benefit and provide at least $3 billion of additional money to help communities and people who need help now, which makes more sense for everyone than continuing litigation that only squander resources."
The report searched through company records to track payments made to Sackler family members, including payroll and compensation records, accounting systems and travel and expense reports.
From 1995 to 2007 — the period before Purdue was fined for its misleading marketing over OxyContin — the family had extracted a much smaller amount from Purdue, estimated at $1.3 billion, the report found. That's only about one-tenth the amount the family received in the decade since 2008, according to the report.
"Full transparency"
New York is one of about two dozen states that are opposing a settlement with the Sacklers, which would include a $3 billion payment and require them to give up control of Purdue.
"We need full transparency into their total assets and must know whether they sheltered them in an effort to protect against creditors and victims," James said.
Sixteen states have sued Sackler family members by name, alleging they drained billions from the company since 2007. That's when the drugmaker pleaded guilty to misleading doctors, patients and regulators about the popular painkiller's risks.
In 2017, the U.S. Department of Health and Human Services called the opioid crisis a public health emergency. In 2016, more than 47,000 people died from overdosing on opioids, the agency said.
