SCOTUS and the Sackler Bankruptcy Settlement

Gainesville, Florida (Special to Informed Comment; Feature) – Allen Frances, M.D., distinguished former chair of psychiatry at Duke University school of medicine wrote in a Oct., 2017 New Yorker magazine expose, “Their name (Sackler/Purdue Pharma) has been pushed forward as the epitome of good works and of the fruits of the capitalist system. But, when it comes down to it, they’ve earned this fortune at the expense of millions of people who are addicted. It’s shocking how they have gotten away with it.” Long overdue, the Sacklers and Big Pharma are finally starting to pay for the opioid crisis.

In a recent 5-4 decision, the U.S.Supreme Court rejected Purdue Pharma’s controversial bankruptcy settlement that protected the billionaire Sackler family from further liability for the opioid epidemic in the USA. The Harrington v. Purdue Pharma SCOTUS case blocks a ruling by a federal bankruptcy court in New York that was first rejected by a district court but later appealed before the US Department of Justice finally challenged it before the Supreme Court.

The original deal allowed Purdue, the Sackler owned pharmaceutical company behind the prescription opioid OxyContin, to restructure and protect Sackler billionaires without requiring them to declare personal bankruptcy. From the huge fortune they made from OxyContin the Sacklers agreed to contribute $6bn to the settlement from the vast fortune they made from OxyContin plus relinquish ownership in Purdue Pharma.

In a bankruptcy filing, a New York Times article,”The Sacklers Could Get Away With It,” reported, “debts are forgiven — “discharged,” in legal terms — after debtors commit the full value of all of their assets (with the exception of certain types of property, like a primary home) to pay their creditors. That is not, however, what the Sacklers want, and indeed the members of the family have not filed for bankruptcy themselves. What they proposed instead is to be shielded from all OxyContin lawsuits, protecting their tremendous personal wealth from victims’ claims against them. What’s more, a full liability release would provide the Sacklers with more immunity than they could ever obtain in a personal bankruptcy filing, which would not protect them from legal action for fraud, willful and malicious personal injury, or from punitive damages”.

By using the bankruptcy agreement, Purdue/Sackler wanted to resolve lawsuits, including those filed by state and local governments, alleging that Purdue Pharma caused a crisis killing half a million Americans when it asserted that OxyContin was non-addictive while it promoted massive over-prescribing via pill mills. Elizabeth Prelogar, U.S. solicitor general, argued that “the release of the Sacklers from future liability is not authorized by the bankruptcy code and constitutes an abuse of the bankruptcy system.”

Paragona of Good Works

With charitable foundations on both sides of the Atlantic, the Sacklers, who are based in New York, have donated millions to the arts and sponsored faculty at Yale and many other universities. In each case, the family’s name is displayed prominently as the benefactor. Forbes listed the collective estimated worth of the 20 core family members at $14bn in 2015, partly derived from $35bn in sales revenue from OxyContin between 1995 and 2015. The name Sackler is displayed in the forecourt at the Victoria and Albert Museum in London and was noted in the Sackler Gallery at the Serpentine in 2013. The ancient Egyptian Temple of Dendur has a Sackler Wing in the Metropolitan Museum in New York. The Sackler Centre for Arts Education at the Guggenheim and many other arts institutions around the world have galleries or wings named after the Sackler family.

But few know Sackler wealth comes from Purdue Pharma, a private Connecticut company the family developed and wholly owns. In 1995, the company revolutionised the prescription painkiller market with the invention of OxyContin, a drug that is a legal, concentrated, chemical version of morphine or heroin. It was designed to be safe; when it first came to market, its slow-release formula was unique. After winning government approval it was hailed as a medical breakthrough, an illusion that many now refer to as “magical thinking”.

It was marketed to physicians, many of whom were taken on lavish junkets, given misleading information and paid to give talks on the drug . Patients were wrongly told the pills were a reliable long-term solution to chronic pain, and in some cases were offered coupons for a month’s free sample. DEA data says that the US has been flooded with about 10 billion pain pills a year. Most pain drugs were sold by a small number of pharmacies, with prescriptions for these drugs written by a small number of physicians at pill mill clinics that charged cash for prescriptions. Data has shown these clinics were good OxyContin customers for the Sacklers/Purdue Pharma. Launched in 1996, Purdues OxyContin sales strategy was highly successful for twenty years because it alleged concentrated aggressive OxyContin marketing programs on what Purdue labeled ‘supercore clinics’, i.e., pill mills.

Profit, Plunder, Death

The untimely overdosing death of famous singer Tom Petty can be traced to the Sackler family and Purdue Pharma according to many addiction specialists.The family of Tom Petty said that the singer’s death was caused by an accidental overdose with a cocktail of prescription drugs and pain pills, including oxycodone and fentanyl. Although prescriptions for opioids fell in response to the crisis, Americans didn’t shake the habit or seek rehab; they turned to heroin instead. Four out of five people in the US who try heroin today started with prescription painkillers, according to the American Society of Addiction Medicine. Alarmingly, street heroin started being secretly cut with the dangerous synthetic opioid fentanyl.

By misleading physicians about the safety of OxyContin in order to earn $35bn in sales revenue from the toxic pain drug between 1995 and 2015, many addiction specialists say that Purdue Pharma owners, the Sackler family, bear the lion’s share of the responsibility for many deaths and today’s opioid crisis. Legal experts, the NYT writes, conclude that “allowing the bankruptcy court to impose a global OxyContin settlement may at first appear to be an efficient way to resolve litigation that could drag on for years, the Sacklers will benefit from this expediency at the expense of victims. At stake is whether there will ever be a fair assessment of responsibility for America’s deadly prescription drug epidemic. Protection from all OxyContin liability for the Sackler family would be an end-run around the reckoning that justice requires”.

Just like all Big Pharma corporations, Sackler/Purdue pharma are dedicated to the bottom line of maximization of profit; everything else is of insignificant value compared to this. Their large and aggressive marketing campaign to sell the supposedly ‘safe’ pain drug OxyContin appears to have disregarded all boundaries and turned this dangerous drug into immense profit for themselves. There are always among us those self-serving and toxic individual and corporate predators who regard democracy/government regulation/community as an obstacle to their greed and avarice. The opioid epidemic is now burgeoning in the U.S. with millions of ruined lives, individuals, families. The Sacklers want to retreat back into their money and vast profiteering, and let other people clean up and pay for the overall and inevitable long-term suffering, death and destruction they allegedly created.

The SCOTUS decision recognizes plaintiff’s due process rights and the ability of plaintiffs to sue the Sacklers. The Sacklers, they argued, should not be rewarded for their contribution because they “created the need for that money” by taking it out of the company in the first place, setting up the situation where they would be protected from lawsuits “by piggybacking on the bankruptcy of their company.” In agreement with. SCOTUS, U.S. Attorney General Merrick B. Garland said in a statement, “The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”

F. Douglas Stephenson , LCSW, is a retired psychotherapist and former instructor of social work in the University of Florida Department of Psychiatry. He is a member of Physicians for a National Health Program.