Video produced and edited by Sean Morrow and Brooke Shuman
The Sacklers became one of the richest families on Earth by creating a massive opioid crisis. While 500,000 people died, they quietly hid $11 billion to avoid losing it in lawsuits. We exposed how the Sacklers made (and kept) their wealth on this episode of The Class Room with Second Thought. Below is a full transcript of the video.
[Tiffinee Scott]: How can you blame the victims, how can you possibly blame the victims for something you created, manufactured, and marketed?
That’s Tiffnee Scott, a mother who lost her daughter to opioid addiction. Tiffnee was re-enacting her testimony from the bankruptcy trial of Purdue Pharma.
Purdue’s marketing of their opiate painkiller Oxycontin–which represented 80% of their business–is nearly entirely responsible for the opioid addiction epidemic crushing America today.
The company pleaded guilty to related charges in federal court twice. And Purdue is–or was, we’ll get to that—owned almost entirely by one family, The Sacklers.
They are among the richest families on Earth, who at one point were worth at least 13 billion dollars. And you probably already know how corrupt the Sacklers are: books, documentaries, congressional hearings, an entire acted-out Hulu miniseries. They’ve been sued by 48 out of 50 states, their names have been removed from buildings,
Everyone on Earth seems to get it: The Sacklers are largely to blame for a drug crisis that’s killed half a million people. And yet The Sacklers still have a ridiculous amount of money and will likely never face any change in the extreme comfort of their lives.
They pursued endless capital accumulation over public health and they got away with it by exploiting Byzantine corporate and financial law to hide their wealth and allying with the very people who were supposed to be regulating them.
This is The Class Room from More Perfect Union. And today we’re going to look at How The Sackler Family Got Rich.
Step 1: Market OxyContin Directly to Doctors
Arthur Sackler and his brothers, Raymond and Mortimer Sackler, bought a small drugmaker, Purdue Pharmaceuticals, in 1952. As head of the company, Arthur Sackler pioneered a revolutionary idea that would change the entire industry and make his descendants insanely rich.
But it wasn’t a life-saving medication or any other scientific advancement. It was a marketing strategy. Direct-marketing pills to doctors. A doctor should–theoretically–choose what medication a patient needs based on the patient’s medical history and existing research on the possible pharmaceutical solutions. Doctors should find out about new drugs from colleagues, textbooks, and medical journals.
Purdue weaseled its way into those sources of information: they paid for and published reports on the efficacy of their drugs, started their own medical journals, ran summits, and hired doctors to endorse their products to other doctors all in the name of getting those doctors to prescribe more Purdue products.
The Medical Advertising Hall of Fame inducted Sackler for “bringing the full power of advertising and promotion to pharmaceutical marketing” in 1997.
Arthur died before Oxycontin was invented–a fact his living relatives whip out whenever his name is pulled off a building–but his marketing strategy created the crisis we see today.
When oxycontin launched, Purdue went on a marketing blitz in the Arthur Sackler style: they sent almost a thousand sales reps across the country armed with lists of doctors they knew were already over-prescribing opiates –it was Glengarry Glen Ross with addictive drugs.
Salesmen were given huge bonuses for pushing more pills, and they were “allowed to draw their own fake scientific charts, which they then distributed to doctors.”
Purdue made donations to The Joint Commission– a non-government non-profit that accredits healthcare organizations. Joint Commission accreditation is required to operate in many states.
Purdue’s donations bought them a change in Joint Commission guidelines: they put out a Purdue-sponsored pain management guide recommending doctors stop stigmatizing opioids, and that doctors who didn’t prescribe adequate opioid painkillers could lose accreditation.
Medical offices were being threatened with their very existence: prescribe Oxycontin, or else.
Purdue wanted as many people as humanly possible using their drug, no matter how many actually needed it.
In 2001 alone, Purdue spent 200 million dollars marketing OxyContin. Not research, not development. Marketing. And it worked: by 2010 they were slinging 2.3 billion dollars of the stuff a year.
Step 2: Accumulate Wealth
[This] made The Sacklers very, very rich. They owned the private company almost completely, which meant they didn’t need to reveal the company’s financials to the public in any way. And the company only truly had one responsibility: increasing value for shareholders–in this case shareholders were nearly wholly the Sacklers. And they were enabled by a broken medical economy built to incubate and encourage companies like them: The federal government barely regulates drug pricing or pharmaceutical executive salary.
Federal and state governments give pharma companies tax breaks and research grants with little oversight into how these companies’ financials. The type of pharmaceutical marketing that made The Sacklers rich is still completely legal: nothing is stopping anyone from adopting the Sackler model of selling a drug. And because in the current system there are so many different buyers of drugs–individual patients, healthcare facilities, and private insurance companies–the pharma companies can set their price at whatever they want and get it.
The few regulations the government does have on pharmaceuticals, like FDA approval of new drugs, were easily circumvented by Purdue: Curtis Wright, the Director at the FDA who approved Oxycontin, mysteriously got a 400,000 a year job with Purdue shortly after.
Step 3: Get Away With It
The same government that enabled the Sacklers to accumulate their wealth is enabling them to get away with what they’ve done: Purdue Pharma pleaded guilty in federal court twice: once in 2007 for misleading doctors and regulators. They settled: Purdue, the corporation, and a few top executives had to pay a fine. The Sacklers themselves were untouched.In 2020 they pleaded guilty in federal court again and settled.
The company paid out 8 billion dollars and The Sacklers themselves paid 225 million: nothing compared to their vast wealth. But the whole world has turned on them, right?
Purdue Pharma was overwhelmed by lawsuits and is going bankrupt–and that’s where all the Sackers’ wealth was–and the family seemingly and openly committed the crime of the century.
But thanks to corporate liability and bankruptcy law, the Sacklers are able to completely shield themselves from any legal trouble.
The family is nearing a settlement that would bankrupt Purdue Pharma, but end all state lawsuits and protect the Sacklers from being sued by anyone for causing the opioid crisis. But, despite Purdue being the source of their wealth, the bankruptcy doesn’t really hurt them: The family was constantly pulling cash out of the company… from taking regular dividends to sketchier ways, like cash payouts to shell companies they owned, travel expenses, legal fees, payroll for fake cushy jobs, and other benefits.
This isn’t just The Sacklers, many major private corporate shareholders do it: when a billionaire says they don’t have ‘liquid’ assets because it’s all tied up in the company, don’t believe them.From 2008 to 2019, the height of the opioid crisis, The Sacklers pulled almost 11 billion dollars from the company, which they get to keep.
There are currently no open criminal cases against The Sacklers.
A coalition of Senators like Elizabeth Warren, Ed Markey, and even Joe Manchin are asking the Department of Justice to open an investigation into the family, but it’s been ignored so far.Representative Carolyn Maloney introduced the SACKLER Act which would limit how lawsuits are dropped when a company goes bankrupt, making it hard for billionaires to use their companies as legal shields.
For now, the Sacklers can retreat into the darkness with their billions.
But Purdue wasn’t alone, Johnson and Johnson and other pharmaceutical companies also settled in court for their part in the crisis.And nothing essentially changed about the way pharmaceutical companies do their business.
Preventing the next drug profiteering crisis means changing the greater system: By allowing for-profit companies to dominate our healthcare infrastructure, we’ve created a system that inherently isn’t about health, it’s about profit. It’s right there in the name: for-profit.
A government with single payer healthcare, like Medicare for All, would be “immune” to companies like Purdue causing further drug epidemics, because its primary goal would be public health, not profit.