Sacklers quit board amid shifts for OxyContin maker
STAMFORD — Two years ago, eight Sackler family members who own OxyContin maker Purdue Pharma served on the company’s board. Today, none of them remains on the panel.
A spokesman for the Stamford-based company confirmed to The Advocate this week that the last of the Sacklers on the board stepped down at the beginning of 2019.
For years, the Sacklers have appeared impervious to outside pressures to reform the company that they closely guard. But the board departures, as well as a number of other major moves in recent months, suggest that the billionaire owners could be rethinking how they run their business, as they grapple with hundreds of lawsuits alleging that Purdue’s marketing stoked the opioid crisis — including complaints by Connecticut, Massachusetts, and most recently, New York, that directly accuse the Sacklers.
“The Purdue Pharma board has long included a contingent of strong, independent directors,” the company said in a statement. “In recent years, as boards — both public and private — have moved in the direction of greater independence, there has been a collective desire among family directors to do so as well. The (2017) passing of (Purdue co-founder) Dr. Raymond Sackler accelerated that transition, and the board no longer includes any family members.”
A message left for a Sackler family spokesperson seeking comment on the board changes was not returned.
Litany of accusations
The late Raymond Sackler and his late brother Mortimer Sackler bought Purdue Pharma’s predecessor company, Manhattan-based Purdue Frederick, in 1952. The headquarters were moved to Norwalk in 1983, then, in 2000, to their current downtown Stamford base, 201 Tresser Blvd.
In its early days — decades before the 1996 launch of OxyContin — the Sackler-owned Purdue focused on products such as laxatives and arthritis treatment.
Today, it is not the co-founders, but rather their widows, five of their children, and one grandchild who comprise the eight defendants in the Connecticut, Massachusetts and New York lawsuits.
Seven of the eight took seats on the Purdue board in the early 1990s, according to the litigation. The eighth came on in 2012.
The group includes a Connecticut-based trio: Greenwich’s Beverly Sackler, widow of Raymond Sackler; Greenwich’s Jonathan Sackler, son of Raymond and Beverly Sackler; and Kathe Sackler, daughter of Mortimer Sackler and who has held multiple residences in the state, according to public records.
Since an un-redacted version was filed in January, Massachusetts’ complaint has garnered particular attention, largely due to the unprecedented amount of detail it gives about the Sacklers’ control of Purdue. Much of the information is culled from internal company documents.
“They hired hundreds of workers to carry out their wishes, and they fired those who didn’t sell enough drugs,” the lawsuit said. “They got more patients on opioids, at higher doses, for longer, than ever before. They paid themselves billions of dollars.”
Purdue and the Sacklers have denied the allegations. In the past month, both the company and the Sacklers have filed motions to dismiss the Massachusetts complaint.
In a court filing this week, the Sacklers said the lawsuit contains “misleading and inflammatory allegations.”
Among the octet, Richard Sackler figures particularly prominently in the litigation. The son of Raymond and Beverly Sackler, he previously served as CEO and senior vice president of the company.
At a launch party for OxyContin, Richard Sackler predicted a “blizzard of prescriptions that will bury the competition,” according to the Massachusetts suit.
In recent years, OxyContin has generated most of Purdue’s estimated annual sales of more than $3 billion, according to the lawsuits.
Kathe and Jonathan Sackler also played instrumental roles, according to court records. Both served, for a time, as vice presidents.
Massachusetts accuses the duo of knowing, as early as the 1990s, about the potentially devastating effects of long-term opioid use and depicts them as having a fixation on growing the company’s sales.
In 1997, Richard Sackler, Kathe Sackler, and other Purdue executives concluded — and recorded in “secret” internal correspondence — that doctors mistakenly thought OxyContin was weaker than morphine, according to Massachusetts. The misunderstanding led to significantly more OxyContin prescriptions, even as a substitute for Tylenol.
Massachusetts also accuses Kathe Sackler of spearheading Project Tango, a 2014 plan for Purdue to start selling drugs to treat opioid addiction.
“In their internal documents, Kathe and staff wrote down what Purdue publicly denied for decades: that addictive opioids and opioid addiction are ‘naturally linked,’” the lawsuit said. “They determined that Purdue should expand across ‘the pain and addiction spectrum,’ to become ‘an end-to-end pain provider.’”
By early 2015, Project Tango ended. The complaint does not elaborate on the reasons for terminating the program.
The Sacklers, however, did not give up on such initiatives. Last year, Richard Sackler gained patent approval for a buprenorphine opioid-addiction treatment.
Few of the lawsuits’ allegations solely focus on Beverly Sackler, although Raymond Sackler’s widow is still named in them.
The family’s board departures apparently started with her exit. She left the panel in October 2017, followed by Richard Sackler last July, and two more shortly after that, according to Massachusetts.
Four remaining family members, including Kathe and Jonathan and Sackler, appear to have stepped down at later dates.
Corporate-turnaround specialist Steve Miller, who took over as chairman last July, now leads a board of five members.
Despite the board overhaul, the Sacklers have made no statements indicating that they would consider selling the business.
Purdue CEO and President Craig Landau confirmed last month that the firm was considering bankruptcy. But filing for Chapter 11 protection would likely focus on managing legal liability, not on setting the stage for a sale of the entire company.
In the past year and a half, Purdue has already undergone significant shifts
Last year, it stopped marketing its opioids to medical prescribers and disbanded its sales force. The sales team’s demise resulted in hundreds of layoffs.
Now, the company is increasingly focusing on non-opioids.
A new Purdue subsidiary gained U.S. Food and Drug Administration approval last month for a drug called Adhansia XR, to treat attention deficit hyperactivity disorder, known as ADHD.
Any marketing campaigns for Adhansia would face more discerning audiences than when OxyContin went on the market.
“If there’s one good thing that came out of the opioid epidemic, it’s that most physicians are very jaded now about information that is provided by pharmaceutical companies,” said Dr. Carl Mueller, associate chairman of psychiatry in the Stamford Health system, which includes Stamford Hospital. “There’s been a shift toward much higher levels of skepticism. Ultimately, that’s a good thing.”
In February, another new Purdue subsidiary secured the FDA’s endorsement for a fast-tracked review of a rare-cancer drug.
Also last month, Purdue announced an FDA fast-track designation for a “nalmefene hydrochloride” injection that would treat known or suspected opioid overdoses.
The company said it would not profit from the latter medication, but that pledge has not won over some of its critics.
“I don’t believe that they should be able to manufacture and sell controlled drugs,” said Dr. Andrew Kolodny, co-director of opioid policy research at Brandeis University’s Heller School for Social Policy and Management. “This is a company that has shown, over and over again, that it has put profits over public health.”
At the same time, the company and the Sacklers have signaled their willingness to make large payouts to resolve some of the litigation.
As part of a $270 million settlement last month of Oklahoma’s lawsuit, the Sacklers are contributing $75 million to a new national center focused on addiction, at Oklahoma State University’s campus in Tulsa.
Purdue and the Sacklers did not admit to any culpability in Oklahoma’s opioid crisis. The Sacklers were not named as defendants in that complaint.
“The first rule of crisis communication theory is to admit your wrongdoings,” said Debbie Danowski, an associate professor of media studies at Sacred Heart University in Fairfield. “Quite the opposite, in the news reports I’ve heard, the family has denied any wrongdoing. These types of statements only serve to anger the public. Admitting wrongdoing, then making a concerted effort to put time and money behind fixing it is a better way to repair the family’s image.”
The torrent of litigation has also ratcheted up scrutiny of the Sacklers’ prolific philanthropy.
Late last month, the Solomon R. Guggenheim Museum in Manhattan said that it would not accept additional contributions from the family branch of one of the defendants named in the lawsuits, Mortimer D.A. Sackler, a former museum board member and son of the late Mortimer Sackler.
In February, protesters demonstrated at the Guggenheim, calling out the museum for its ties to the Sacklers.
A United Kingdom-based group of Sacklers — which includes Theresa Sackler, another of the defendants and widow of Mortimer Sackler — has also faced growing pressure.
The Tate group of galleries has said that it would not take more money from the family. The London-based National Portrait Gallery, in consultation with the Sacklers, is not proceeding with a $1.3 million donation.
In Connecticut, Sackler beneficiaries include the University of Connecticut, Yale University, Greenwich Hospital and Stamford’s Palace Theater. So far, they have not renounced their funding from the family.
“I’m not surprised some organizations have decided to take a public stance against the Sacklers, given all the news coming out about the opioid crisis,” said Karla Fortunato, president of the Connecticut Council for Philanthropy. “If they receive positive feedback, I think other organizations will feel comfortable taking a similar stance.”
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