High on Your Own Supply: The Sackler Family, the Opioid Epidemic, and Purdue Pharma’s Bankruptcy

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     Recent Events from the Supreme Court

Last month, the Supreme Court agreed to hear a challenge from the U.S. Department of Justice to the legality of Purdue Pharma’s bankruptcy settlement, blocking a $6 billion settlement that would have provided the company’s Sackler family with immunity from opioid-related civil claims. If the settlement is eventually approved, Purdue Pharma would no longer exist but the Sacklers, who used to own control the company, would be shielded from any future opioid-related civil liability without declaring bankruptcy in their individual capacities.

Experts say that it is very rare for the Supreme Court to agree to hear a bankruptcy case, largely because bankruptcy cases rarely make it to the nation’s highest court, as parties are pressured to settle early on. In a statement, Purdue Pharma expressed its disappointment of the government’s challenge, saying that the Justice Department has been able to “single handedly delay billions of dollars in value that should be put to use for victim compensation…”. On the other hand, the government has described this immunity deal as “exceptional and unprecedented” and an “abuse of the bankruptcy system” in court papers, emphasizing that lower courts have been unclear on when individual parties can be released from liability for actions that cause extensive social harm. Regardless of the controversy on both sides, the case is slated to hear oral arguments in December. The specific issue the Court will decide is whether nonconsensual third-party releases, the legal mechanism that shields the Sackler family from civil liability, are permissible under the bankruptcy code. Due to its national importance, this decision could not only determine how third-party releases are used in mass torts cases like the case at hand, but also influence how the same releases work under corporate restructurings.

 

     History of Purdue Pharma & OxyContin and Its Impacts

This is not the first time that Purdue Pharma and the Sacklers have hit the news. Purdue Pharma is notorious for manufacturing OxyContin, a drug that has been cited by healthcare workers and scholars as a major catalyst for today’s opioid epidemic.   that launched in 1996 as a pain medication for moderate to severe pain, and there is strong evidence that its introduction and marketing as a less addictive opioid has largely contributed to In fact, OxyContin’s active ingredient, oxycodone, has similar effects to heroin, leaving OxyContin users vulnerable to heroin usage – about 80 percent of people who used heroin first misused prescription opioids such as OxyContin. By making OxyContin the longest-lasting oxycodone on the market, Purdue Pharma and the Sackler family had succeeded in creating an extremely popular pain medication that attracts both abusers and legitimate users. Due to the drug’s easy tolerance development and powerful withdrawal symptoms, a 2015 study found that about 8 to 12% of its legitimate users became abusers, and 21 to 29% of users misuse the product.

Despite its commercial success, OxyContin has had devastating consequences for public health as the catalyst to the modern opioid epidemic. Over 75% of the nearly 107,000  drug overdose deaths in 2021 involved an opioid. In 2023, there are over 136 opioid-related deaths in America every day. Despite the Sacklers’ previous denial of responsibility, the statistical trends are clear – the first wave of overdose deaths began with the increased prescription of opioids in the 90s, with deaths involving prescription opioids increasing since at least 1999, just three years after OxyContin was introduced. On top of the immeasurable losses of human life, economists have estimated that the economic burden of both the dependence and fatal overdoses from opioids is  $78.5 billion annually, which includes the costs for health care, treatment, lost productivity, and criminal justice system engagement. Potentially the most sinister aspect of OxyContin’s impact is the documented evidence that Purdue Pharma was fully aware of the drug’s high abuse potential, but concealed that information and continued to market it as less addictive than other opioid pain medications. Though this false marketing eventually led to Purdue Pharma’s 2007 guilty plea to a felony charge of “misbranding”, the destructive impacts of the drug are irreversible.

Even though these statistics are impactful, personal stories remain the greatest source of shock and pain for communities who were disproportionately affected by the introduction of OxyContin. In state of Kentucky’s 2008 deceptive marketing trial against Purdue, a former Assistant Deputy Attorney General prepared to present a 1997 photograph of a rural Kentucky high school’s football team– nearly half the players in the photo died of overdoses, or were addicted.

 

     Public Opinion of the Opioid Epidemic

With the introduction of synthetic opioids like fentanyl, the opioid epidemic has become a full-blown national crisis in recent years. Therefore, it is not surprising that 61% of American adults consider the opioid epidemic a “major public health emergency” on a bipartisan basis. An even greater number, 68% of American adults, think the opioid crisis is a “major problem” in the U.S. Unlike with other drug epidemics, the American public also largely prefers treatment over punitive measures when it comes to tackling the opioid epidemic. However, evidence signals that Americans disagree on what those treatments should be – for example, in a 2017 statewide public opinion poll, 80% of Virginians supported the expansion of community-based treatment centers in their own neighborhood, while only 48% supported needle exchange programs to prevent infections.

These differences in thought are also reflected in the pending case at the Supreme Court, with robust debate over whether the Court’s intervention actually benefits the victims of the opioid epidemic. The supporters  see it as furthering justice and preventing abusive bankruptcy settlements, as the proposed completely releases the Sackler family from any further civil liability for their role in the opioid epidemic. Its critics say that the Court’s review will take too long and be too costly, withholding billions of dollars from victims who have been patiently waiting for a settlement and a sense of closure.

 

     Cornell’s Ties with the Sackler Family

In addition to their ownership of Purdue Pharma, the Sackler family is famous for their philanthropy. Even before the launch of OxyContin, the family has donated to a number of powerful educational and cultural institutions, many of which bear the Sackler name: the Sackler Gallery at the Smithsonian, the Sackler Museum at Harvard, and a number of named professor positions and medical research positions. However, in light of Purdue Pharma and the family’s role in the opioid crisis, many institutions have dropped the Sackler name from their doors. In the U.S., these institutions include Tufts University, Yale University, NYU, the Met, and The Guggenheim, but one institution is notably missing from this list: Cornell University. Though Cornell currently refuses donations from the Sackler family, Cornell and Weill Cornell accepted over $5 million from the Sacklers in 2014-2019. Weill Cornell Medicine’s Sackler Institute for Developmental Psychobiology and its Raymond and Beverly Sackler Center for Biomedical and Physical Sciences still bear the Sackler name. Even as other influential institutions began to drop the family name, the university has yet to propose any plans to change the name of either of these institutions.

 

Suggested Citation: Allison Kim, High on Your Own Supply: The Sackler Family, the Opioid Epidemic, and Purdue Pharma’s Bankruptcy, Cornell J.L. & Pub. Pol’y, The Issue Spotter (October 2, 2023), http://jlpp.org/blogzine/high-on-your-own-supply-the-sackler-family-the-opioid-epidemic-and-purdue-pharmas-bankruptcy.

 

Allison is a 3L at Cornell Law School. She grew up in northern Virginia and graduated from The George Washington University where she studied criminal justice. In her free time, she enjoys running and listening to podcasts.