David Sackler Defends Family’s Role in Opioid Crisis and Pledges Help
(Bloomberg) -- Members of the billionaire family that own Purdue Pharma LP have a “moral responsibility” to fight the opioid crisis but didn’t break the law in overseeing sales of the company’s addictive painkiller OxyContin, former board member David Sackler said during questioning in bankruptcy court.
The grandson of the late Purdue co-owner Raymond Sackler fielded questions from lawyers by video conference over the course of several hours on Tuesday. It’s the first time a member of the family has appeared before U.S. Bankruptcy Judge Robert Drain, who has overseen Purdue’s Chapter 11 proceedings since 2019 and is reviewing a company plan to settle thousands of lawsuits over its role in the opioid epidemic.
“Our family cares deeply that OxyContin was part of the opioid crisis, but it was unintentional,” Sackler said, responding to a question from a lawyer for the state of Washington. “We don’t believe our conduct was illegal in any way, and we want to help.”
The trial in New York, which began last week, is the culmination of years of political pressure and public outcry over Purdue, which state lawyers say pushed doctors to overprescribe OxyContin and downplay its highly addictive nature. Critics say the company remains a symbol of corporate greed, and some argue the bankruptcy allows Purdue’s owners to escape accountability for the opioid crisis.
The proceedings have also become something of a political lightning rod as they near their close, recently drawing rebukes from likes of U.S. Senator Elizabeth Warren of Massachusetts and political satirist John Oliver.
The company has proposed a plan it values at more than $10 billion to settle trillions of dollars of opioid liabilities. If the proposal is approved by Drain, the Sacklers would pay about $4.3 billion over the next nine or 10 years and receive lifetime immunity from an array of claims.
While most of Purdue’s creditors support the settlement plan, some parties -- including an arm of the U.S. Department of Justice -- are trying to block it. The legal releases that would be granted to Sackler family members are unusually broad, they argue, and would be forced on state attorneys general who don’t want to relinquish claims against them.
Drain indicated last week he has some “concerns” about the breadth of the releases, which court testimony has shown would protect a vast array of Sackler-related entities from past and future conduct, as well as liability related to non-opioid products.
But David Sackler reiterated on Tuesday that members of his family would be unlikely to contribute a swath of their wealth to Purdue’s settlement if they didn’t receive sweeping legal protections.
“This is intended to be a global release,” said Sackler, adding that he likely wouldn’t support a narrower version of the releases. Bankruptcy court is the best, and perhaps only, way to facilitate the kind of sweeping settlement the family requires, he said. “I don’t know of another forum that will allow this kind of global resolution.”
The family behind Purdue would be required to try to sell its overseas pharmaceutical businesses in the next seven years in order to fund its multi-billion dollar piece of the drugmaker’s settlement. Those entities -- including Mundipharma -- could fetch some $4.5 billion in a sale, according to an estimate filed with the bankruptcy court.
But because the family’s payments would be spread over a decade -- and because overseas assets wouldn’t have to be sold immediately -- investment returns in the interim could make Purdue’s owners richer at the end of the payment period than they are now, according to a consultant hired by states opposing the deal. The wealth of the Sackler family members involved in Purdue could exceed $14 billion by 2030, even taking the settlement payments into account, compared to a net asset estimate of $10.7 billion in the most recent reporting periods, according to court papers.
When asked on Tuesday if his family might ultimately come out of the deal with more money than it had going in, Sackler pushed back.
“I don’t think anybody can say that with any certainty,” Sackler said. “As you know, markets go up and down.”
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