The Sackler family, the owners and heirs to the Purdue Pharma fortune, still has a great deal of wealth amassed through company revenue. Purdue Pharma, founded in 1952 by the three Sackler brothers, has faced years of legal battles over claims that it downplayed the risks of addiction with its popular pain reliever Oxycontin.
The last time Forbes estimated the net worth of the remaining 40 members of the Sackler family, the number was $13 billion, which makes them the 19th richest family. Since 2016, the figure has shifted due to litigation and settlement fines. As of December 2020, Forbes estimated that the Sackler family’s wealth has dropped to about $10.8 billion.
According to CNBC, members of the Sackler family wrote recently in letters to the U.S. House Oversight Committee that family members on the board only had assets of about $1.1 billion.
Purdue Pharma's legal settlements
Purdue Pharma reached a legal settlement in 2007 after three current and former executives pleaded guilty to criminal charges. The parent company of Purdue Pharma agreed to pay $600 million in fines based on charges that the company misled doctors, patients, and regulators about the addictive risks of Oxycontin.
Three individuals also pleaded guilty to misbranding the drug and were fined $34.5 million. Oxycontin is a powerful pain narcotic that the company originally claimed was less likely to cause addiction or abusive behavior than similar medications.
In 2020, the company pleaded guilty to criminal charges related to marketing Oxycontin. The settlement charged Purdue Pharma $8.3 billion in penalties as well as $225 million in civil penalty fines to the Sackler family.
Purdue Pharma bankruptcy
Now, Purdue Pharma is proposing a $10 billion bankruptcy exit plan. The deal includes $500 million in cash that would settle hundreds of thousands of lawsuits against the company. It also provides $4.2 billion in payouts from Sackler family members over the next decade. The schedule of payouts wasn't given in specific detail.
If the agreement is approved by the White Plains, N.Y. federal bankruptcy court, the Sacklers will give up ownership of its domestic operations but retain ownership of overseas subsidiaries for seven years or more. The Sacklers would admit no wrongdoing.
Immediately, nearly half of all the states’ attorneys general denounced the proposal. They argued that the Sackler family needs to be held responsible for their role in the opioid epidemic, which killed nearly 450,000 Americans between 1999 and 2018.
Massachusetts Attorney General Maura Healey criticized the plan. According to NPR, she said, “What the Sacklers are offering is a way for the payments to be structured that makes it convenient for them.” A joint statement by 24 states’ attorneys general said that the Sacklers and Purdue Pharma need to offer more money upfront to help impacted communities right away.
The proposal also allows Purdue Pharma to be rebranded and be indirectly owned by two new trusts. Some of its future profits would go towards addressing the opioid crisis.
Over time, the settlement provides $700 million to $750 million to victims and families, with an average of $5,600 per claim.
Purdue Pharma stock
Since Purdue Pharma is privately owned, there isn't any publicly traded stock.