Purdue payments to certain Sacklers hit $10bn over a decade
Some members of the Sackler family who owned stakes in OxyContin maker Purdue Pharma withdrew more than $10bn from the company and their generic drug manufacturer Rhodes during the 10-year period that opioids emerged as the biggest health crisis in the US, according to an audit filed with a bankruptcy court.
The report by AlixPartners, a consultancy that specialises in restructuring, said the members of the billionaire philanthropist family took $10.4bn in cash distributions from the company from 2008 to 2017. The audit, filed late on Monday, said the total taken out of the companies was eight times more than in the previous 12 years.
Some states suing Purdue Pharma over claims it contributed to the US opioid crisis have begun targeting members of the Sackler family since Purdue filed for bankruptcy in September. Purdue had been trying to reach a $10bn agreement with the many states, cities and counties, which are pursuing lawsuits related to the epidemic.
New York and Massachusetts have both cited members of the family in their lawsuits, as they seek compensation from the company to fund healthcare costs related to the opioid epidemic. The New York attorney-general’s office claimed in September that it had tracked about $1bn in wire transfers by members of the Sackler family, including through Swiss bank accounts. Forbes has estimated the family fortune at about $13bn.
In a statement to the New York Times on Monday, Letitia James, the New York attorney-general, said the filing demonstrated the need for “full transparency” with regard to the Sackler family’s assets in order to learn “whether they sheltered [assets] in an effort to protect against creditors and victims”.
Purdue said it was providing an “extraordinary amount of detailed financial information” about a private company. “Purdue is providing this exceedingly rare level of transparency to help ensure that all claimants, including attorneys-general and the communities they represent, can support the settlement structure that would transfer more than $10bn of value to the American public to address the opioid epidemic and save lives,” a spokesperson said.
Daniel S Connolly, attorney for the Raymond Sackler family, said the numbers show more than half of the money withdrawn was paid in taxes and reinvested in businesses that will be sold as part of the proposed settlement.
“The Sackler family hopes to reach a productive resolution where they contribute Purdue for the public benefit and provide at least $3bn 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,” Mr Connolly said.
The withdrawals are on top of compensation to Sackler family members on Purdue’s payroll, which totalled $371,400 from 2008 to 2018; expenses reimbursements of about $1.9m; and pension benefits reaching nearly $3m for three members of the family, and two members who are not yet eligible for their pensions.
Purdue Pharma also paid legal expenses on behalf of the Sackler family members because of their corporate indemnity policy of $17.6m. Legal services for the owners have not been covered since the start of March.
The audit was ordered by the special committee of the board of directors of Purdue Pharma. AlixPartners used data from the company’s accounting system, internal reports and audited and internal financial statements. At the time of bankruptcy, Purdue had $1.4bn on its balance sheet and no debt.