Despite Years Of Litigation, The Sackler Family Behind OxyContin Is Still Worth Billions (2024)

Just a few years ago, the Sackler family was best known for their philanthropic giving — particularly to the arts — with their last name etched on the most prominent buildings and museums in the world, from Harvard and the University of Oxford to the Metropolitan Museum of Art and the Louvre.

But then in 2016, an estimated 42,000 people died from opioid overdoses, according to the Department of Health and Health Services (HHS), more than any previous year on record. Around 40% of those deaths involved a prescription opioid. The next year, the HHS declared the opioid crisis a public health emergency. Forbes had first reported in July 2015 that the Sackler family was worth an estimated $13 billion. Major exposes by the Los Angeles Times, The New Yorker and GQ followed, tying the Sacklers even more publicly to their little-known company, Purdue Pharma, maker of OxyContin, and cementing the belief that Purdue Pharma was at the center of the opioid epidemic. By 2017, ten states had sued Purdue Pharma for deceptive marketing of its drugs and its alleged role in opioid-related overdoses and deaths through OxyContin.

By 2019, 48 states had sued Purdue Pharma and the Sacklers for their alleged roles in the epidemic (the other two states, Oklahoma and Kentucky, had already settled). In September 2019, the company announced that Purdue Pharma and certain members of the Sackler family had reached a tentative settlement with about two dozen states, though details were still being determined. Part of that settlement would include $3 billion in cash from the Sackler family over seven years, and that Purdue Pharma would file for bankruptcy and be transformed into a public benefit corporation. The family also agreed to sell Purdue Pharma’s international subsidiary, Mundipharma, with the proceeds going toward the settlement, for “individuals, families and communities affected by opioid addiction and abuse,” according to a representative for some members of the Sackler family. That same month, Purdue Pharma filed for Chapter 11 bankruptcy. The settlement does not include an admission of wrongdoing.

Then, in October this year, the Department of Justice announced that Purdue Pharma agreed to plead guilty to criminal charges around its marketing of OxyContin, and that five members of the Sackler family would pay another $225 million in civil penalties.

Not all states have agreed to the September 2019 settlement, and Mundipharma has yet to be sold. But all this litigation has put a dent in the Sacklers’ fortune. In 2016, when Forbes last estimated the family’s wealth, the Sacklers were worth around $13 billion. As part of the 2019 agreement, the owners of Purdue Pharma are putting the company’s assets in a trust “for the benefit of claimants and the American people.” Thus, what was once the family’s most valuable asset has essentially been wiped out. Factoring in the fines that the Sacklers have already paid as settlements, we estimate that the family — composed of about 40 members — is now worth about $10.8 billion. Much of that comes from profits that the family received from Purdue Pharma between 2008 and 2017. A representative of one branch of the Sackler family, who is in touch with the other branch, declined to comment on Forbes’ net worth estimate.

The Early Years

Two doctors, John Purdue Gray and George Frederick Bingham, founded Purdue Frederick Company in 1892. Brothers Raymond and Mortimer Sackler (and a third brother, Arthur, whose estate sold his stake in the company to his brothers after his death), who were both physicians by training, bought the company in 1952. In the early years under the Sacklers, the company sold products such as earwax remover and laxatives, as well as Betadine, an antiseptic that is still sold to this day.

By the early 1990s, the Sacklers moved into the growing field of pain management. It was renamed Purdue Pharma in the early 1990s and, in 1995, launched OxyContin. It quickly became a company bestseller thanks to aggressive marketing tactics — including claims that the drug was fairly non-addictive — that led to a surge of doctors widely prescribing it for all kinds of pain, from the severe to the very minor. As a result, OxyContin alone has generated approximately $30 billion in revenue for Purdue over the years, according to the Committee on Oversight and Reform of the U.S. House of Representatives. It was a highly profitable business. Bankruptcy filings show that, from 2008 to 2017, the Sackler family received cash distributions from Purdue Pharma totaling $4.1 billion, even after paying taxes and reinvesting a slice of the profits in the company.

Over the years, the Sacklers have used those riches to dole out millions of dollars to the arts. Members of the family have reportedly donated $50 million worth of art to the Smithsonian. The family gave $11.3 million to the New York Academy of Sciences. And the Mortimer D. Sackler Foundation gave at least $6 million to the Museum of Natural History in Manhattan. The Sacklers were also major donors to the Metropolitan Museum of Art, where there’s a wing named for the family.

But in the midst of the lawsuits against Purdue — and as institutions worldwide began turning away Sackler money — two different philanthropic arms of the family announced last year they would halt further donations. “I am deeply saddened by the addiction crisis in America and support the actions Purdue Pharma is taking to help tackle the situation, whilst still rejecting the false allegations made against the company and several members of the Sackler family,” Theresa Sackler said in a statement at the time. “The Trustees of the Sackler Trust have taken the difficult decision to temporarily pause all new philanthropic giving, while still honouring existing commitments."

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Despite Years Of Litigation, The Sackler Family Behind OxyContin Is Still Worth Billions (2024)
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