Sacklers withdrew over €9bn from Purdue while opioid crisis erupted

As scrutiny of Purdue Pharma's role in the opioid epidemic in the US intensified during the past 12 years, its owners, members of the Sackler family, withdrew more than $10 billion (€9 billion) from the company, distributing it among trusts and overseas holding companies, according to a new audit commissioned by Purdue.

The amount is more than eight times what the family took out of the company in the 13 years after OxyContin, its signature product, was approved in 1995.

The audit is likely to renew questions about how much the Sacklers should pay to resolve more than 2,800 lawsuits that seek to hold Purdue accountable for the opioid crisis.

The family has offered to contribute at least $3 billion in cash as part of a settlement to resolve thousands of lawsuits brought by state and local governments against Purdue. But 24 states have refused to sign onto the agreement, arguing that the Sacklers should pay more.

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The new report, a 350-page forensic accounting prepared by Alix Partners, was filed in bankruptcy court in New York on Monday. Ultimately, it does not answer a key question for investigators – how much the Sacklers are actually worth and where their money is located.

Audit

The audit notes that in the first dozen years that OxyContin was approved – from 1995 through 2007 – Purdue’s payouts to the Sacklers totaled just $1.32 billion; from 2008 through 2017, the period of intense scrutiny by the auditors, the payments totaled $10.7 billion.

This report lands just ahead of a bankruptcy court hearing Thursday about the Purdue restructuring, the centerpiece of which has been a dispute over the company’s settlement offer.

For their part, the Sacklers, who have agreed to relinquish ownership and control of Purdue, would pay $3 billion over seven years, as well as much of the proceeds of the sale of their other companies that manufacture opioids internationally.

A sticking point in negotiations has been the status of the state lawsuits against the Sacklers. The litigation has been stayed against Purdue, because it is in bankruptcy. But the Sacklers have not filed for bankruptcy, and two dozen states want to keep pursuing them.

The family wields a powerful stick: if the lawsuits against them continue, they could withdraw the settlement offer. – New York Times