Empire of Pain: The Secret History of the Sackler Dynasty

by Patrick Radden Keefe

By including a great deal of sensitive, never-before-seen information in her complaint, and then pushing to make the complaint public, Healey was seeking to establish an incontrovertible record of how this historic crisis of addiction had been born.

the family started systematically taking more and more money out of the company. From 1997 through the guilty plea in 2007, Purdue had distributed only $126 million in cash to the Sacklers. Beginning in 2008, it started to distribute billions.

The states had all brought their suits separately, but what the Sacklers suggested was an overall resolution that would sweep in all of the plaintiffs in all the different suits. The concept that David and his team outlined was that the Sacklers would relinquish control of Purdue and turn the company into a public trust, and the family would donate a large sum of money to address the opioid crisis. In exchange, the Sacklers would be granted immunity from “all potential federal liability” related to OxyContin. It was a grand bargain, a single negotiated pact that would resolve all of the cases at once and deliver the Sacklers the peace of mind of knowing that they would not spend the rest of their lives in litigation. Almost as soon as the offer had been made, the terms leaked to the press. A wave of headlines announced the news: “Purdue Pharma Offers $10–12 Billion to Settle Opioid Claims.”

But as further specifics of the Cleveland proposal emerged, the Sacklers’ offer turned out to be more complicated and considerably less spectacular. The plan was for Purdue to declare bankruptcy and then be converted into a “public benefit trust.” According to Purdue’s lawyers, the trust would include more than $4 billion in new drugs to treat addiction and counteract overdoses, which would be provided as an in-kind gift. That would be supplemented by an additional $3 or $4 billion in drug sales by the version of Purdue that would emerge from bankruptcy as a public trust. So the personal contribution of the Sacklers would be not $10 billion (much less $12 billion) but $3 billion. And even that money would not come out of pocket. Instead, the Sacklers suggested that their contribution be financed by selling off Mundipharma, the global pharmaceutical concern that had continued to cultivate new markets for opioids abroad.

There was also one very notable nonmonetary provision. Under the terms of the deal that David Sackler offered, his family would admit to no wrongdoing whatsoever.

it seemed significant that the Sacklers, having been exposed as paragons of rapacious greed, remained unprepared to contribute any money of their own beyond what could be generated from the sale of Mundipharma.

“Almost all states would agree to the deal if the Sackler family would guarantee it 100%,” said North Carolina’s AG, Josh Stein, who negotiated with the family. But the Sacklers’ position, Stein said, was “Take it or leave it.” This recalcitrance left the negotiators on the plaintiffs’ side feeling openly disgusted. “I think they are a group of sanctimonious billionaires who lied and cheated so they could make a handsome profit,”

Healey made no effort to conceal the indignation she felt at the thought that the Sacklers would push their company into bankruptcy now that it was no longer of any use to them, then waltz off with the billions they had taken out of it.

Curiously, a partisan divide emerged among the state prosecutors. Red state AGs were more inclined to go along with the deal the Sacklers were proposing, whereas blue state prosecutors wanted to fight for more. Some speculated that this might be due to how dire the need for emergency funds was in the red states, or to different political cultures—Republicans more inclined to accommodate corporate interests, Democrats more given to redistributionist zeal. But another factor might have been that behind the scenes the Sacklers were actively whipping votes.

When Judge Drain halted all litigation against Purdue, it seemed to Maura Healey that she and Letitia James and other state prosecutors should be able to proceed with their cases against the Sacklers. After all, the family wasn’t filing for bankruptcy. The Sacklers had “extracted nearly all the money out of Purdue and pushed the carcass of the company into bankruptcy,” Josh Stein, the North Carolina AG, said. “Multi-billionaires are the opposite of bankrupt.” But on September 18, Purdue made a special appeal to Judge Drain. Having maintained the ruse, for decades, that the Sacklers and Purdue were separate, their lawyers now argued that the Sacklers were “inextricably twined” in any lawsuits against their company.

On October 11, 2019, Judge Drain sided with the Sacklers. It was an “extraordinary” step, he acknowledged from the bench, but he thought it was appropriate.

Prior to 1996, the triplicate states actually had a higher rate of overdose deaths than the rest of the nation. But what the team of economists discovered was that shortly after the launch of OxyContin, that relationship suddenly flipped. Overdose rates everywhere else started to climb much faster than in the triplicate states. Those five states were sheltered, enjoying “uniquely low” growth in overdose deaths, the scholars found. In fact, even after the triplicate programs were discontinued several years later, “their initial deterrence of OxyContin promotion and adoption had long-term effects on overdose deaths in these states.” By contrast, states with more exposure to OxyContin during the years immediately after it was introduced “experienced higher growth in overdose deaths in almost every year since 1996.”

economists found that in the five states that had triplicate programs in place back when OxyContin was introduced, heroin and fentanyl deaths rose much less dramatically.

“Our results show that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades.”

Purdue had created a generation of people who were addicted to opioids, through the careful and relentless cultivation of demand for the drug. When the reformulation happened, that demand did not go away: it just found another source of supply. The paper established that even the boom in illicit fentanyl, like the rise in heroin before it, “was driven by demand considerations existing years prior to the entry of fentanyl.” Synthetic opioid abuse was disproportionately high in states that had high rates of OxyContin misuse.

It was a graphic measure of the Sacklers’ vanity, and of their pathological denial, that the family was prepared to debase itself by trying to force its name back onto a university where the student body had said, quite explicitly, that they found it morally repugnant.

There was a dark absurdity in the spectacle of Judge Drain and all of these bankruptcy lawyers arguing self-seriously about how to divvy up what was left of Purdue Pharma—which now amounted to cash and assets of roughly $1 billion—when the Sacklers were looking on from the sidelines, apparently untouchable, and holding on to so much more. According to deposition testimony by one of Purdue’s own experts, the family had taken as much as $13 billion out of the company.

A single insurer, United Health, submitted a stunning filing, revealing that when it commissioned an analysis of how many of its policyholders had been prescribed Purdue opioids and then subsequently diagnosed with an opioid use disorder, the result was in the “hundreds of thousands.”

the $225 million the Sacklers were being forced to pay was “a little over 2 percent of that $10 billion they took out of the company,”

The Sacklers might have agreed to pay a $225 million penalty, but they refused to acknowledge any personal wrongdoing, even as their company pleaded guilty to felony charges.

Everything is legal, for a price

“Here we are, so many years later when the Justice Department has a second chance to do it right—and once again they let them off the hook,” Maura Healey said in an interview on MSNBC. “There’s no one going to jail. There’s no justice. The Sacklers face no admissions of guilt,” she continued. The settlement amounted to little more than “a guilty plea against a company that is already in bankruptcy.”

The Sacklers didn’t want to be looking over their shoulders for the rest of their lives. And Judge Drain, with his singular fixation on conserving value in the bankruptcy, appeared to be sympathetic to this consideration. At an early hearing, in February 2020, he suggested that the only way to achieve “true peace” was to have what he called a “third-party release,” a ruling that would grant not just Purdue but also the Sackler family freedom from any future opioid-related lawsuits.

Drain indicated that he was raising the matter early, because in some parts of the country it would be illegal for a federal bankruptcy judge to enjoin state authorities from bringing their own lawsuits against a third party, like the Sacklers, who had not even declared bankruptcy in his court. The case law was evolving, Drain said.

For more than a year, Drain had presided over the case, and periodically, he would pay lip service to the many victims of the opioid crisis, who existed somewhere outside the courtroom, like an abstraction. But now, when they broke into the proceedings asking to be heard, and he was confronted with the actual human beings whose suffering he had so frequently and casually invoked, he seemed unsettled, and eager to retreat back into the comforting obfuscations of the law.

If there was one attribute that Richard shared with his uncle Arthur—apart from a common name, a genius at marketing, and a sense of unquenchable ambition—it was the stubborn refusal to admit doubt, even in the face of contrary evidence, and a corresponding ability to delude himself into a blinkered faith in his own virtue.

These talking points had been carefully engineered. The family would perform compassion, even sorrow—but not acknowledge wrongdoing.

A lot of Americans got addicted to OxyContin, Krishnamoorthi said. “I would submit, sir, that you and your family are addicted to money.”

David had talked about his desire to “humanize” his family, but one problem for the Sacklers was that, unlike a lot of human beings, they didn’t seem to learn from what they saw transpiring in the world around them. They could produce a rehearsed simulacrum of human empathy, but they seemed incapable of comprehending their own role in the story, and impervious to any genuine moral epiphany. They resented being cast as the villains in a drama, but it was their own stunted, stubborn blindness that made them so well suited to the role. They couldn’t change.

On the subject of the family’s implacable refusal to recognize what they had done, Cooper said, “I think Upton Sinclair once wrote that a man has difficulty understanding something if his salary depends on his not understanding.” He continued, his voice soft and deliberate, “Watching you testify makes my blood boil. I’m not sure that I’m aware of any family in America that’s more evil than yours.”

The family was issued a sweeping grant of immunity from any future civil claims related to the opioid crisis. They also secured a similar immunity for scores of their lawyers, advisers, and PR fixers, ensuring that the enablers who had helped to protect them for so long would be rewarded for their loyalty. At a glance, the $4.3 billion figure might seem like a lot of money. But the fine print of the deal stipulated that the Sacklers would pay it out slowly, over nine years. Because their remaining fortune, estimated to be roughly $11 billion, continued to generate huge annual income in the form of interest and investment returns, they would likely be able to pay the whole sum without ever touching their principal. When they were done paying, they would be richer than they were when they started.

One thing I noticed, in this research, was a new emphasis, among the cartels, on heroin. That led me to OxyContin. The cartels had been reviled, rightly, for their willingness to sell an addictive product and destroy lives. But I was astonished to discover that the family that presided over the company that made OxyContin was a prominent philanthropic dynasty with what appeared to be an unimpeachable reputation.