MORAL LAUNDERING

Big Pharma Family turns Bankruptcy to Profit BY SOPHIA DELUCA

As the manufacturer of OxyContin, a settled 23,000 claims and paid out over $1.1 narcotic commonly prescribed for pain billion. relief that has since become the gate- Although it follows the same basic princiway to opioid addiction, Purdue Pharma is ple, Purdue Pharma’s settlement differs from widely credited as the drug company that al- this case in several key ways. The Purdue most single-handedly kickstarted the opioid Pharma bankruptcy claim asks for the Sackler epidemic that currently claims an average of family to be protected from lawsuits for the 130 lives everyday. This staggering loss of life next nine months, with the expectation that has precipitated almost every state and 2000 they will pay $3 billion out of their personal U.S. cities and counties to sue Purdue Pharma. fortune over the next seven years. However, a Amidst midst these lawsuits, the Sacklers, the New York judge ordered a pause in lawsuits, family who founded and owned Purdue Phar- but only until November 6, 2019. In addition ma, continue to profit from these opioids even to this financial contribution, the Sacklers will as Purdue Pharma declares Chapter 11 bank- also relinquish any ownership over the comruptcy, yet again walking away with minimal pany, which brought in $790 billion from the damage to their personal fortune. sale of OxyContin over the past year.

On September 14, 2019, the company de- Upon closer look, these sacrifices are much clared bankruptcy, claiming an inability to less noble than they seem. Purdue currently finance legal fees and settlements for over has a patent over the sale of tamper-resistant 2,600 federal and state lawsuits. Purdue OxyContin, a virtual monopoly on the producclaimed Chapter 11 bankruptcy, which allows tion of opiates. This patent, however, will soon for businesses to reorganize and restructure, expire, allowing other companies to produce while paying off the claims against them. Un- the drug, and diminishing the drug’s value on der this bankruptcy declaration, Purdue Phar- the open market. The imminent expiration ma become a public benefit trust, a for-profit of this patent and the subsequent decline in corporation that would commit to using all value of Purdue’s signature drug makes this company profits to paying settlements, aiding a convenient time for the Sacklers to abandon communities plagued by the opioid epidem- Purdue. ic, and funding research and development of This fortuitous financial loss aside, the medicines to treat addiction and overdoses. family will still give up $3 billion dollars of The Sackler family would also relinquish pri- their personal fortune, less than a fourth of vate ownership of Purdue under this agree- one of America’s wealthiest families’ $13 bilment. lion overall fortune. This number appears

Purdue’s bankruptcy declaration appears even more inconsequential in light of the acto be premeditated and intentional, intended cusation that the Sacklers moved around $13 to maximize profit and minimize harm to the billion of Purdue Pharma’s profits to personal company. After hiring Steve Miller, who is col- accounts over the years through wire transfers loquially known in the business world as the and the use of Swiss bank accounts and prop“turn-around kid,” as a restructuring specialist erty investments. The Washington Post reseveral years ago, Purdue began working with ported that the $13 billion dollar estimate was a law firm specializing in bankruptcy. found in the transcript of a deposition from Louvre, Smithsonian, and the Metropolitan

This specific model of declaring bankrupt- one of Purdue’s business advisors. Museum among others, that entire galleries cy to save a company is not unprecedented. These wire transfers, and the knowledge of have been named in honor of their family. Purdue’s actions are modeled off of the Johns the Sackler’s astounding fortune, are the rea- Although these institutions are beginning to Manville Personal Injury Trust. Creating a sons that several states are refusing the pro- refuse these donations, these donations to similar trust allowed the bankrupt asbestos posed “bankruptcy settlement.” In the context prominent art museums are prime examples manufacturing company Johns Manville to of the size of their wealth and the consequenc- of the campaign of moral laundering the Sackpay settlements for those suffering from me- es of their practices, the Sackler family’s $3 lers have pursued to protect their public repsothelioma, an asbestos-caused cancer, with- billion offer seems less like a meaningful con- utation. out paying the legal fees for the thousands of tribution to fix an issue they had a large part in Despite the promise of reorganization, lawsuits against them. Since its creation, the causing, and more like a desperate attempt at funds for research, and aid for communities Johns Manville Personal Injury Trust has “moral laundering.” suffering from addiction, Purdue Pharma’s Forbes defines moral laundering as the act declaration of bankruptcy seems to be yet anof wealthy individuals and companies mak- other way for the Sackler family to engage in ing large donations and engaging in philan- moral laundering. Under the current terms thropic efforts in order to preserve their moral of the deal, the family stands to escape the standing in the public eye. Notwithstanding threat of lawsuits until November 6, and retheir promised $3 billion payout, the Sacklers linquishing control of a company that stands have a history of moral laundering. Accord- to become far less profitable in the near future ing to Vox, the Sacklers have actually donated regardless, all because of a minimal payout enough money to art museums, including the relative to their wealth. GEORGIA POLITICAL REVIEW | 27