New Hampshire’s Associate Attorney General, James Boffetti, says members of the Sackler family “have blood on their hands.”
The Sacklers are the owners of Purdue Pharma, maker of the opioid painkiller OxyContin, which has figured prominently in the drug epidemic here and nationwide. States, counties and municipalities across the country — including all 10 counties and 13 cities in New Hampshire — have sued Purdue and other drug manufacturers and distributors for how they marketed and sold prescription opioids.
Last week, The Washington Post reported that 22 attorneys general have agreed to a tentative settlement with Purdue Pharma that would resolve the civil cases against the company. But New Hampshire did not sign onto that agreement.
The proposed settlement is “not a good deal for New Hampshire,” said Boffetti, who is overseeing the state’s lawsuits against drug companies implicated in the opioid crisis. And it lets the Sackler family walk away with billions of dollars in proceeds from the ongoing manufacture of these addictive drugs, he said.
Here’s how, according to Boffetti:
Over the past decade or so, the Sacklers have taken money out of Purdue Pharma, to the tune of billions of dollars, Boffetti said. “The estimate is maybe somewhere around 10 to 12 billion that they have basically sucked out of the company for their own personal greed and their own personal benefit. And so they have drained the resources of Purdue to make themselves mega-rich.”
Active deception alleged
Family members then used that money to invest in international pharmaceutical companies, he said. “They were actively deceiving and defrauding people with these opioid products and because they did, they were able to acquire billions of dollars in interests in pharmaceutical companies internationally,” he said.
On Friday, The New York Times reported that the attorney general’s office in New York has tracked about $1 billion in wire transfers by the Sackler family, including some through Swiss bank accounts. The implication is that the family was trying to shield its wealth as it faced thousands of lawsuits across the country.
Under the tentative deal, the Sacklers would agree to sell off those international assets and commit the first $3 billion in profits over seven years to the states and other creditors, Boffetti said. “The next $3 billion they get to keep,” he said. “So they get to make themselves whole.”
And after that, he said, the Sacklers would split any remaining proceeds with the creditors.
“This is what people need to know,” Boffetti went on: “Those companies are going to continue to operate, because it will take them years to wind them down, and they generate cash flow” — by some estimates, up to $1 billion a year. “And they propose that they can find ways to use that to defray costs, to pay for lawyers, to help sell those businesses,” he said.
“They get to walk away with all the money they took out of the company running this opioid scheme and none of that money is being asked for them to pay back as a civil penalty. There was no pain; there was no penalty at all for what the Sacklers have done here.
“And it’s not unfair to say the Sackler family have blood on their hands for what they did, because countless people have died from a scheme that they created, that they put into place, that resulted in the excessive overprescribing of the use of opioids. Because they told doctors, and they told patients, that these drugs were safe and effective and non-addictive for chronic pain,” Boffetti said. “All of which they knew was false.”
There’s more. The proposal also would set up a new company run by a trust that would continue to operate as a for-profit business; trustees would be nominated by the attorneys general, he said. “So tell me how the attorneys general should be in the position of having some say about running a drug company … which is producing the exact product that we think was so instrumental in causing the harm,” he said.
And all of that is why New Hampshire won’t sign onto the deal, he said. “It’s not right for the people of New Hampshire. It’s not right and just, because the Sacklers basically get to benefit tremendously from this deal. So we said no.”
So what happens next?
If Purdue Pharma files for bankruptcy protection, as proposed in the settlement, all civil lawsuits against the drugmaker will be “stayed,” according to Boffetti. That includes a lawsuit the New Hampshire Attorney General’s office filed against Purdue Pharma in Merrimack County Superior Court; that case is set for trial next year. The state, counties and municipalities would become creditors and it would be up to a bankruptcy court judge to decide who gets how much.
But New Hampshire also has sued Johnson & Johnson affiliate Janssen Pharmaceuticals, and two opioid distributors, McKesson and Cardinal Health, in Merrimack County court, and those lawsuits would proceed, Boffetti said.
Not signing on to the settlement agreement doesn’t mean New Hampshire wouldn’t get any money, Boffetti said. “The judge has a lot of latitude in a bankruptcy case to decide how much money is paid and to whom, and we will be in there fighting for New Hampshire,” he said.
He said he expects the states that disagree with the proposed settlement will have the chance to make their case to the bankruptcy court judge. And he said the Attorney General’s office has been strongly advocating that any settlement funds be allocated not just per capita, but based on the impact of the drug crisis. “We continue to fight for a higher share for New Hampshire other than its population,” he said.
Meanwhile, lawsuits filed by New Hampshire counties and cities against the pharmaceutical companies in federal court have all been moved into what’s called a “multi-district litigation” (MDL) case in Ohio, the “National Prescription Opiates Litigation.” The first of those cases is set for trial in October.
Last week, the presiding judge in the MDL case, Judge Dan A. Polster, appointed 49 entities to serve as representatives for the entire “negotiation class” (the approximately 2,000 plaintiffs). They include the cities of Concord and Manchester.
James Kennedy, city solicitor for Concord, explained that means those communities will have “first-hand knowledge of any settlement, and we’ll be able to determine whether or not that settlement makes sense for the city of Concord.”
He hasn’t seen the terms of the tentative settlement with Purdue Pharma, and he said any such agreement would have to go through the bankruptcy court. Any agreement with Purdue Pharma won’t affect the MDL case against the other drug manufacturers and distributors, Kennedy said. “This is just one defendant,” he said.
Emily Gray Rice, Manchester’s city solicitor, has not seen the tentative settlement agreement with Purdue Pharma either. “At this time, the emphasis should be on the word ‘tentative,’” she said. “And I wouldn’t want to pre-suppose what may happen in the bankruptcy court when I don’t know any of the details or any of the provisions of this alleged tentative settlement.”
Opt out option
Plaintiffs also would have the option of opting out of the MDL, Rice said.
“How the legal process ultimately concludes is very unclear at this point,” she said. “I would welcome the opportunity to tell the story of the New Hampshire opioid crisis to a New Hampshire jury, but whether or not that ultimately occurs is something that we just don’t know at this point.”
Steven Bolton, city attorney for Nashua, said if Purdue Pharma does file for bankruptcy, the civil cases against that drugmaker would be stayed. “And we would make our claims then in the bankruptcy court where the filing is made.”
In bankruptcy court, Bolton said, “not all creditors have to agree to a plan.”
“The judge can order a plan in certain circumstances even with creditor opposition, so we could potentially be impacted,” he said. “But there’s a long way between here and there.”
Bolton said his city’s police, fire department, public health and schools have all been adversely affected by the drug epidemic. And, he said, “We fully anticipate that the repercussions will continue for decades.”
“We have suffered a lot of expenses in the past and we anticipate a lot of expenditures in the future,” Bolton said. “We think those that have benefitted from this tragedy, this crisis, ought to pay those expenses, past and future.”
Suing the Sackler family
In addition to suing Purdue Pharma, some jurisdictions have also sued individual members of the Sackler family. Is that something New Hampshire might do if the case against Purdue Pharma is settled? “I can just say this: we’re looking at all our options very closely these days,” Boffetti said. “Very closely indeed.”
For years, Boffetti said, he has heard heartbreaking stories from families who have lost loved ones to addiction and overdose. His message to those families: “We are in the fight with you.”
“We’re going to keep fighting … until we can keep all these deaths from happening.”
New Hampshire’s drug crisis is far from solved, Boffetti said. Overdose deaths may be dropping somewhat, but that’s in large part due to the investment the state has made in making available naloxone, the overdose reversal drug, he said.
The state will need funding to pay for drug treatment into the foreseeable future, Boffetti said. And that’s what justice would look like, he said: “That the people who did this pay to fix what they broke.”