Sackler Family Member Denies Improper Purdue-Funds Transfers

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Former Purdue Pharma Director David Sackler, in testimony to U.S. lawmakers, denied claims that his family improperly shifted billions of dollars from sales of the controversial opioid-based painkiller OxyContin to offshore accounts.

Sackler, the son of ex-Purdue President Richard Sackler, told a U.S. House of Representatives committee Thursday only a “very small amount” of money moved out of the family-owned drugmaker by the Sacklers wound up in foreign banks, and those transactions shouldn’t raise questions.

“The transfers you are referring to have been identified as legally appropriate and disclosed,” Sackler said under questioning by Representative Carolyn Maloney, a New York Democrat and chair of the House Oversight Committee. David and his cousin, Kathe Sackler, agreed to testify publicly for the first time under oath before the committee along with current Purdue Chief Executive Officer Craig Landau.

The issue of what happened to at least $10 billion in distributions from Purdue to Sackler family members is a hot topic among some state attorneys general who oppose the company’s proposal for resolving all opioid lawsuits against it.

Read More: How the Sacklers Shifted $10.8 Billion of Their Opioid Fortune

Under a deal proposed as part of Purdue’s bankruptcy case, the family would no longer own the company. A group of state attorneys general and opioid victims are objecting to having governments forced to get into the drug business to generate funds to beef up opioid-treatment programs and want the Sacklers to personally put up more money as part of the $10 billion deal.

States and municipalities sued Purdue and other makers and distributors of opioids in hopes of recouping billions spent dealing with the fallout from the public-health crisis. More than 400,000 Americans have died in opioid-related deaths over the last 20 years.

Government Lawsuits

State and municipal officials contend there’s evidence some of the Sacklers may have “committed crimes in operating Purdue,” and the governments are pushing for the release of confidential documents to aid in their probes of the family’s role in OxyContin’s marketing and billions in profits. The family denies wrongdoing.

The company pleaded guilty to three felonies tied to OxyContin marketing and agreed to pay $8.3 billion to resolve a government probe into Purdue’s handling of the highly addictive opioid painkiller. The Sacklers also agreed to pay $225 million to settle potential civil claims tied to that marketing.

During the hearing, Maloney asked Landau, Purdue’s current top executive, to identify the individuals who planned and carried out the illegal OxyContin marketing efforts. “Crimes were committed,” the lawmaker said. “Who committed these crimes?” Landau didn’t answer the question specifically.

While the Sackler family members acknowledged OxyContin played a significant role in the U.S. opioid crisis and apologized, they have denied wrongdoing.

When asked if she would do anything differently in the wake of the fallout from Purdue’s handling of OxyContin, Kathe Sackler said she has struggled with that question for years. “Nothing I’ve learned subsequently makes me believe I would have done things differently based on what I learned from management,” the former Purdue director said.

‘Damn Balance Sheet’

Representative Kelly Armstrong, a North Dakota Republican, noted OxyContin sales continued to climb even after Purdue’s guilty plea in 2007 to charges over marketing of the painkiller. To resolve a government probe of illegal sales tactics, Purdue and three of its top executives pleaded guilty to “misbranding” OxyContin. The most recent plea covers marketing after 2007.

The company paid more than $630 million in civil and criminal penalties in 2007, one of the largest pharmaceutical settlements in U.S. history at the time. Purdue specifically acknowledged it trained its sales representatives to mislead physicians about opioid risks. The executives served no time in jail.

“You want to ask what you could have done differently?” Armstrong asked Kathe Sackler. “Look at your own damn balance sheet.”

During the House hearing, the two Sacklers faced acidic comments from some committee members, who pointed to David Sackler’s purchase of a $22 million California mansion as an investment as one place where some of OxyContin profits wound up.

“Watching you testify makes my blood boil,” Representative Jim Cooper, a Tennessee Democrat, told David Sackler. “I don’t think any family in America is more evil than yours.”

The case is Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court for the Southern District of New York (White Plains).

©2020 Bloomberg L.P.

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