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More than 400,000 people in the U.S. have died from opioid use in the past two decades. As the country tries to contain the crisis, many states and cities are challenging the drug manufacturers in court. The latest lawsuit, brought by New York against Purdue Pharma, comes as the company considers filing for bankruptcy. William Brangham talks to Barry Meier, author of a book about Purdue Pharma.
New York state today filed what was called the most comprehensive lawsuit yet against opioid manufacturers, distributors and members of the Sackler family.
The Sacklers are the founding family that owns Purdue Pharma, which manufacturers OxyContin, an opioid sold and abused throughout the crisis.
More than 400,000 people have died in the past two decades from overdoses involving legal and illegal opioids, according to the federal government. At least three dozen states and more than 1,500 cities and counties are also taking opioid manufacturers to court.
Purdue Pharma is directly in the bullseye because OxyContin was so widely used and its marketing practices have been blamed.
As William Brangham explains, the latest lawsuit comes as Purdue Pharma considers filing for bankruptcy.
The concern is that, if Purdue Pharma does file for bankruptcy, the ability of all those states and cities to recover damages will be greatly delayed and reduced by perhaps billions of dollars.
In filing her state's lawsuit today, New York Attorney General Letitia James seemed to target that very issue. The suit itself explicitly seeks to claw back money from members of the Sackler family, alleging they fraudulently transferred profits from Purdue to themselves.
This lawsuit contains detailed allegations about the Sackler family and their attempts to hide the vast fortunes they collected at the expense of actual lives.
In an attempt to shield these fortunes from families whose loved ones have been killed by their products, we allege that the family has illicitly transferred funds from Purdue to personal trusts so that they are potentially outside of the reach of law enforcement and our efforts to seek restitution or penalties.
In a separate development earlier this week, Purdue and the Sacklers settled with the state of Oklahoma for $270 million, just months ahead of what would have been a televised trial where that state took Purdue to court.
Barry Meier has been following all this of very closely. He wrote a book about Purdue Pharma called "Pain Killer: An Empire of Deceit and the Origin of America's Opioid Epidemic."
Barry, welcome back to the "NewsHour."
Let's start talking, first off, about this New York case. The attorney general in New York is arguing that members of the Sackler family somehow siphoned off profits from Purdue, stashed them away, and that that constitutes fraud, the way they did it. Explain her argument.
An Empire of Deceit and the Origin of America's Opioid Epidemic": William, this is all part of a legal chess game that is going on around the bankruptcy issue.
First, Purdue laid down a marker by saying, well, we're getting sued by so many people, we may have to seek bankruptcy, and thus everyone suing us is going to be left out in the cold. That spurred the attorney general in Oklahoma to strike a quick settlement with them.
And now New York is coming in and saying, wait a minute, not so fast, we're going to stake a claim that the Sackler family has been siphoning off money. So if you try to file for bankruptcy, we're going to go after them and claw back this money for restitution.
So the argument in that case is, if you know your company is facing this avalanche of lawsuits, and it might go bankrupt, you're not allowed to siphon money off from that company.
Yes, there's a general concept called, I believe, fraudulent conveyance. I'm not a lawyer.
But if you're, like, facing an avalanche of litigation, and you say, you know, cousin Joe, take $100 million and stick it in the Bahamas somewhere, that doesn't really help you at the end of the day, if it comes out you did that.
We should say here Purdue vigorously denies New York's charges, called them baseless. The Sackler family also called the suit a misguided attempt to place blame where it doesn't belong.
But the New York attorney general's case really does target the Sackler family also for their behavior with regards to the management of Purdue and how the drug was manufactured and how it was marketed.
What are they arguing in that regard?
What we're seeing in all these lawsuits — and the New York attorney general kind of went another step further — is the claim that the Sackler family was intimately involved in the operation of Purdue, that they directed some of the illegal marketing activities of Purdue or knew about them and benefited from them.
Obviously, the family absolutely denies that. They said, we didn't know anything wrong was going on, and we moved quickly to stop it. But the — you know, the litigation is, you know, pulling up documents that are raising questions about that.
And, ultimately, we will find out, hopefully one way or another, just what they knew and when they knew it.
With regards to the Oklahoma settlement, $250 million, you seem to be arguing that Oklahoma looked at this potential looming bankruptcy and said, let's just try to get what we can now before the company goes Chapter 11.
Is that accurate?
I think the attorney general of that state made it very clear in his comments that they were prompted by Purdue — you know, this specter that Purdue used of filing for bankruptcy. In fact, two of the Purdue family members were slated to be deposed in New York City about a week ago. Those depositions were put off.
And, lo and behold, the settlement sort of materialized quickly after that. And I think he was quite clear that, you know, yes, they could have won a lot more money, potentially, if they went to trial, but they went on the bird-in-the-hand-type theory.
Barry Meier, as always, thank you very much.
It's a real pleasure, William. Thank you.
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