Maloney and DeSaulnier Release Documents Following DOJ Settlement with Purdue and Sackler Family

Statement

Today, Rep. Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, and Committee Member Rep. Mark DeSaulnier released documents obtained by the Committee as part of its investigation into Purdue Pharma and members of the Sackler family, who have owned a controlling share of Purdue since 1952.

The release of documents follows the announcement last week that the Department of Justice (DOJ) reached settlements to resolve criminal and civil investigations into Purdue and a civil investigation into members of the Sackler family.

"The documents we are releasing today show that members of the Sackler family--and in particular Dr. Richard Sackler--recklessly pushed Purdue executives to flood the market with OxyContin to maximize their personal wealth, even after the company reached a settlement with DOJ in 2007 for misleading marketing," said Chairwoman Maloney and Rep DeSaulnier. "We are disappointed that DOJ forfeited yet another opportunity to hold members of the Sackler family fully accountable for their role in fueling the devastating opioid epidemic."

The documents released today show:

Members of the Sackler family used the OxyContin business to "stretch" Purdue's financial targets and increase earnings.

In March 2008, Dr. Richard Sackler--who is the son of one of Purdue's original owners and has held top positions at the company including President, Chief Executive Officer (CEO), and Chairman of the Board of Directors--sent an email to then-CEO John Stewart criticizing the company's 2008 performance projections. Dr. Sackler wrote: "I really don't like the forecast at this point. I think it is a typical low ball number that people expect to beat and be complimented for. I want the organization to stretch, not idle as so much of it has for a long time."

In August 2009, Dr. Sackler emailed other members of the Board of Directors concerning declining sales projections for OxyContin. He noted that "the value to us of reversing the current declines of 5-8% and converting them to a 5% growth is worth $1/4 B ($243M) in going from -6.5% to +5.0%; before the decline began, we were growing closer to 10%/yr in the oxycodone ER market. Of no small matter is the profit associated with the incremental sales which at 80% would be ~200M!"

In October 2009, Dr. Sackler responded to a document assessing the company's performance that was circulated to members of the Sackler family and Purdue executives, remarking: "Purdue is beginning to look like a cash cow focused on life cycle extension for oxycodone ER." In 2009, the Sackler family took $1.7 billion out of Purdue.

In October 2013, Mortimer D.A. Sackler--the son of another original co-owner of Purdue and a former Vice President and Co-Chairman of the Board--wrote to members of the Board to express frustration with Purdue's proposed 2014 budget. He wrote, "In my opinion we would be better off laying everyone off and milking the business than doing this!" He also wrote, "Seems like the organization has just fully given up and is resigned to declining volume sales for all our products which bodes really badly for our business and our pipeline (and I would again question the value of investing so heavily in an R&D pipeline whose future is very questionable given the dramatic changes that have happened in the market)."

Members of the Sackler family pressured Purdue executives to grow market share for OxyContin and other opioids, including by targeting high-volume prescribers and pushing higher strength doses.

In order to assess OxyContin's 2008 demand, Dr. Sackler proposed: "Let's measure our performance by Rx's by strength, giving higher measures to higher strengths an[d] especially the new strengths." A Purdue executive later commented, "With the [sales] rep bonus plan we have been very careful to not over incentivize reps to promote the higher strengths over the lower strengths. Alls [sic] strengths are important to the overall success of the brand."

In later years, Purdue adopted a marketing strategy to address the decline in higher dose prescriptions. A document titled "Purdue US Sales and Budget Update" from June 2013 warned, "Titration up to higher strengths, especially to the 40mg and 80mg strengths is declining," but noted, "High dose prescribing grew in physicians we began calling over the last year."

In March 2009, Dr. Sackler requested data on Purdue's share of the market for extended release opioids. After receiving a graph showing Purdue's market share declining, Dr. Sackler responded, "This is not good." He later followed up: "I'm troubled by our continued losing of position to other opioids, especially morphine and methadone. These should be easy ones to compete against and difficult for people to argue for." He later added, "Don't you agree that we can arrest this decline and reverse it?"

In a January 8, 2010, email exchange with then-CEO John Stewart regarding Purdue's 2010 budget, Dr. Sackler expressed frustration with the company's OxyContin sales projections. He wrote: "I just don't see why with all the opportunities many, but not all of which we are trying to exploit, we can't lift our Rx's and our kg 8%. 2009 was affected by the economy (all agreed) but 2010 is likely to be a much stronger year in terms of the economy, so we have this additional lift even before we get the effects of the programs and add additional programs."

In March 2011, after reviewing a report on prescription and stocking data for Purdue's newly launched opioid, Butrans, Dr. Sackler wrote to Purdue's Vice President of Sales and Marketing: "What else more we can do to energize the sales and grow at a faster rate?"

In June 2011, Dr. Sackler reacted to an activity report for sales representatives in the field. He wrote, "Above suggests that we are calling on non-high potential prescribers. How can our managers have allowed this to happen?"
Minutes later, Dr. Sackler asked Purdue's Vice President of Sales and Marketing about a previous request for him to accompany sales representatives in the field, asking: "Who have you chosen for me to go to the field with the week after the budget meeting?"

In August 2013, Dr. Sackler arranged for a "face to face meeting" between members of the Board and the consulting company McKinsey to discuss a McKinsey plan to "Turbocharge the Sales Engine" for OxyContin, including through "Prescriber Targeting." In a memorandum provided to Board Members, McKinsey concluded: "Collectively these findings show significant opportunity to improve targeting and also emphasize the upside from improvement as OxyContin's responsiveness to calls appears significant."

Background

After reportedly rejecting the recommendation of federal prosecutors to indict three of Purdue's top executives on felony charges for their marketing of OxyContin, DOJ settled with Purdue in 2007 on misdemeanor charges of misbranding and $600 million in fines. The agreement did not include an admission of wrongdoing or liability from the Sackler family.

Purdue sold $31 billion worth of OxyContin between 1996 and 2016, and the Sackler family has withdrawn more than $10 billion from Purdue since 2008.

On June 12, 2018, and January 10, 2019, the late Chairman Elijah E. Cummings and Rep. DeSaulnier requested that DOJ produce documents relating to the 2006 decision not to prosecute Purdue's executives. In both instances, DOJ declined to provide a comprehensive set of documents informing this decision.

On March 21, 2019, Chairman Cummings and Rep. DeSaulnier wrote to Purdue requesting documents relating to reports that members of the Sackler family sought to drive up sales of OxyContin and other addictive painkillers while simultaneously expanding the market for medications to treat addiction, even after the 2007 settlement.

Last week's announced settlement did not include any criminal charges against individual members of the Sackler family. Members of the Sackler family agreed to pay $225 million in damages to resolve civil False Claims Act liability--representing only 2% of the family's estimated $13 billion net worth.

The settlement also mandates the conversion of Purdue's OxyContin manufacturing business into a public benefit company managed by communities across the United States.

Earlier this month, 25 state attorneys general sent Attorney General Barr a letter opposing this arrangement--which was initially proposed by Purdue and members of the Sackler family--raising concerns that turning the OxyContin business into a public trust would inappropriately entangle government officials in the sale of opioids, hamstring the government's ability to appropriately regulate the industry, and shield individual members of the Sackler family from individual, personal liability.

Since 1999, nearly 450,000 people in the United States have lost their lives to the opioid epidemic.

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