September 09, 2021
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Clearing House
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The Guardian"Corporate
money has a powerful and malign influence on so many
aspects of American life. But even by that low standard,
events this week in a New York bankruptcy court are
shocking. The legal system has effectively allowed one
of the country’s richest families to buy its way out of
accountability for what a White House commission called
“America’s national nightmare” of mass opioid addiction.
On Wednesday, the
court approved a deal for the dissolution of the opioid
manufacturer Purdue Pharma, which kicked off the opioid
epidemic two decades ago with its illegal drive to sell
a high-strength painkiller, OxyContin. Purdue’s owners,
members of two branches of the now-notorious Sackler
family, are estimated to have made more than $10bn from
the drug – even as the opioid crisis claimed more than
600,000 lives, with the toll climbing higher by the
year.
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Astonishingly, the
Sacklers seem to have been able to work the bankruptcy
process to buy themselves immunity from accountability
in the civil courts – in return for handing over only a
fraction of the money they made from OxyContin – and
still remain one of the richest families in the country.
All while continuing to deny their responsibility for
their role in creating the opioid crisis.
At this point Purdue
Pharma’s reputation is little better than that of a
Mexican cartel. The company has twice pleaded guilty to
felonies, in 2007 and
last year, including
lying about the risk of addiction from OxyContin,
bribing doctors to prescribe it and defrauding the
federal government. But that barely scratches the
surface of the company’s
corruption in pursuit of profit:
it used its money and influence to warp the practice of
medicine, compromise drug regulators and keep open the
doors to mass prescribing of opioids even as evidence of
an epidemic grew.
Those Sacklers
behind Purdue were not bystanders. Several members of
the family served on the company’s board and as senior
executives, and some were directly involved in the drive
to push OxyContin on unsuspecting Americans. And they
happily creamed off the profits.
Yet the bankruptcy
process has granted them sweeping immunity from further
civil lawsuits over the opioid crisis without
acknowledgment of wrongdoing. In fact, in exchange for a
payment of $4.5bn, less than half of their earnings from
Purdue, the Sacklers as individuals won’t have to
declare personal bankruptcy.
In addition, as a
Georgetown university law professor, Adam Levitin, told
Congress in July, the Sacklers have
worked the system so
that they “will actually emerge from Purdue’s bankruptcy
richer than they went into it” because the payments will
be spread over nearly a decade during which the family’s
assets are likely to grow by more than $4.5bn.
The US justice
department has questioned whether the agreement is legal
because it deprives those victimised by the Sacklers,
who oversaw and profited from Purdue Pharma’s criminal
behaviour, of their right to a day in court. Other
critics of the decision have wondered how a bankruptcy
court can grant legal immunity to people who have not
declared bankruptcy.
But that is the
practice that has evolved under laws, many written under
the influence of corporations, that enable businesses to
in effect hand-pick the judges who will handle their
bankruptcy cases.
The US has 375 bankruptcy
judges but, as Levitin told Congress, just three oversaw
the majority of cases filed by large companies last
year. Purdue Pharma
chose to file with one
of those three, Judge Robert Drain, to decide the
conditions of its bankruptcy.
Although Purdue is based in
Connecticut, it filed for bankruptcy in White Plains,
New York, where Drain is the only bankruptcy judge. It’s
unlikely to have gone unnoticed by the Sacklers’ lawyers
that Drain had
an unusual record of
staying lawsuits against third parties who have not
filed for bankruptcy.
One of Drain’s
first steps was to
block efforts to sue individual members of the Sackler
family, even though they were separate from the Purdue
bankruptcy case. Then he permitted the Sacklers to
effectively hold the plaintiffs hostage by offering a
stark choice between settling for a cut of the profits
of misery in return for wiping the legal slate clean or
facing years of court battles.
States,
municipalities and families desperate for money to cope
with the huge social consequences of the epidemic were
left with little choice but to agree, although many
expressed their distaste.
Others intend to
challenge the deal in different courts, including
Washington state’s attorney general, Bob Ferguson, who
called the plan “morally and legally bankrupt”.
All of this might
be more palatable if the Sacklers had shown remorse for
the blood on their hands.
Dr Richard
Sackler, a former president and chairman of Purdue
Pharma, was instrumental in persuading the Food and Drug
Administration (FDA) to approve OxyContin on the false
grounds that it was less addictive than other
prescription opioids. He then promised that “a blizzard
of prescriptions” for the drug would bury the
competition.
When Sackler was
asked at the bankruptcy hearing whether he, his family
or his firm bore any responsibility for the opioid
epidemic, he simply replied: “No”.
Instead, Sackler
and other members of his family have spent their time
smearing the victims. They have claimed that OxyContin
was a legal drug used illegally and that responsibility
therefore falls on the “criminal addicts” who overdosed.
Judge Drain said
he was unhappy with the outcome of the case but that his
hands were tied.
“This is a bitter
result,” he said, arguing that he had little choice but
to agree to the Sacklers’ demands or risk no financial
settlement at all.
The judge’s
critics say the outcome was preordained from the moment
Purdue filed its case in his court.
But it is an
outcome that fits with the history of a uniquely
American epidemic. No other country has experienced the
same scale of opioid addiction and death, in part
because corporations in other countries do not wield the
same influence over the practice and regulation of
medicine.
Neither did Purdue act
alone in this crisis. Drug distributors and pharmacies
jumped on the bandwagon. Other opioid manufacturers,
such as
Johnson & Johnson,
raked in the profits of narcotic painkiller addiction.
Even as evidence of a
crisis grew and doctors witnessing the devastation
sounded warnings, the din of corporate money drowned
them out. The quarter of a billion dollars a year the
drug industry spends on lobbying bought the complicity
of politicians, influenced regulators, weakened
investigations by the justice department and stalled
action by the Drug Enforcement Administration. Purdue
used its political muscle to
head off even more
serious criminal charges and to keep its executives out
of prison.
Above all, the
drug industry kept the doors to mass prescribing of
opioids open for years not because they were an
effective way to treat pain but because they were hugely
profitable. Those same firms are now increasingly
agreeing to payouts to head off a torrent of lawsuits –
but it’s hard to conclude that they regard it as
anything more than the cost of doing business.
Not least because, like the
members of the Sackler family behind Purdue, none of
them
admit to having done
anything wrong.
