Coverage: New York sues the family behind OxyContin, distributors
New York is suing the billionaire family behind the company that created OxyContin, joining a growing list of state and local governments seeking to hold not only the firm but its owners accountable for the nation’s opioid crisis.
Michael R. Sisak and Jennifer Peltz of the Associated Press had the news:
The state, which averages nine opioid-related deaths per day, on Thursday expanded an existing lawsuit against pill maker Purdue Pharma to add members of its controlling Sackler family as defendants. Five other companies that produce opioid painkillers and four drug distributors, which buy medications in bulk and sell them to pharmacies, were also added as defendants.
“This is an extensive lawsuit that leaves no stone unturned,” New York Attorney General Letitia James, a Democrat, said at a news conference.
While other states and localities have filed similar suits, New York is taking some novel approaches, such as seeking to bar the companies from marketing and distributing painkillers in New York unless they abide by strict safeguards.
Jared S. Hopkins and Sara Randazzo of The Wall Street Journal reported that the case attempts to claw back profits:
An amended lawsuit filed Thursday by New York Attorney General Letitia James against Purdue and eight individual Sackler family members is pushing a novel argument that profits paid to Purdue’s owners should be clawed back because of mounting litigation filed against the company. The claims hinge on a legal theory meant to protect creditors from debtors that try to stash or shield assets for their personal benefit.
The billionaire Sackler family allegedly transferred funds from Purdue and an affiliated generic drugmaker called Rhodes Pharmaceuticals LP into various entities that family members control through trusts, according to the amended lawsuit.
Rhodes was formed in 2007, state business records show, five months after Purdue pleaded guilty to federal charges of misleading the public about the addiction risk related to OxyContin. The complaint alleges that a senior manager at Purdue called Rhodes a “landing pad” for Purdue “to prepare for the possibility that they would need to start afresh following the crisis then engulfing OxyContin.”
David Robinson and Matt Spillane of the Westchester Journal News reported that the lawsuit also targeted the drug’s distributors:
The lawsuit also accused opioid distributors, including Cardinal Health and Rochester Drug Cooperative Inc., of buying painkillers in bulk from the manufacturers and flooding communities with dangerous drugs.
The alleged fraud involved distributors improperly selling hundreds of millions of pain pills to pharmacies and other licensed dispensers.
The drugs were allowed to keep flowing despite repeated internal warning signs and complaints at some of the companies, James said, and taxpayers paid for many of the drugs through programs such as Medicaid.
These systemic failures led to massive shipments of opioids to specific pharmacies in New York that showed numerous “red flags,” such as a high percentage of prescriptions paid for in cash or written by a relatively small number of providers who have been charged with, or convicted of, illegal prescribing.