Purdue Pharma pleaded guilty to three federal felonies in November 2020. A month later the House Oversight Committee put three witnesses under oath by video: David Sackler, who sat on Purdue’s board from 2012 to 2018; Dr. Kathe Sackler, a vice president and board member from 1990 to 2018; and Dr. Craig Landau, the company’s president and chief executive. Chairwoman Carolyn Maloney went first, and started with an email.
We’re rich? For how long?
MaloneyI want to focus on one event that I believe was a real turning point in this story, and that is Purdue's settlement with the Department of Justice in 2007. From 1997 to 2007, the Sackler family withdrew a total of about $126 million from the Purdue company. But then in 2007, Purdue reached a settlement with the Justice Department over criminal charges and pleaded guilty and paid a $600 million fine.
MaloneyAccording to documents filed in litigation starting in 2008, right after the 2007 settlement, Purdue distributed more than $10 billion to the Sackler family and the companies that they control. That's almost 80 times what the family had received before 2007.
MaloneyWhen you received that email from your father in 2008, did you know that state attorneys general across the country were investigating Purdue's conduct and that additional settlements or judgments would be coming? Mr. Sackler.
David SacklerBased on my recollection of the time period, no. Purdue at that point had settled with most or a large percentage of the attorneys general, as well as public--public--I--excuse me, private injury plaintiffs. Management made repeated presentations to the board of directors after that point that the----
MaloneyThank you for your answer. My time is limited. And I think that it is clear that you did know that settlements and judgments were coming and you were trying to siphon off as much money as possible before that happened, and I can prove it.
MaloneyMr. Sackler, in May 2007, one week after Purdue's settlement with DOJ on charges of misbranding and agreed to pay $600 million in fines, you sent an email to other family members and said, quote, we're rich? For how long? Until which suits get through to the families, end quote. So, let's cut to the chase. Were you trying to cash out profits so that opioid victims couldn't claim them in future lawsuits?
David SacklerNo. I don't believe that that's what I meant then and I don't believe that's how I've acted since then. The suits that I was referring to----
MaloneyMr. Sackler, may I ask, why did you increase the amount of money you were withdrawing from Purdue so substantially in 2008, $126 million before 2007, in 2008 $10 billion?
David SacklerMa'am, I believe you're mistaken on the record. The distribution in 2008 was nowhere close to $10 billion.
MaloneyOver $10 billion, over $10 billion. Over $10 billion over 10 years. If you won't admit that much, then let's go to the next email. In September 2014, another family member, Mortimer Sackler, emailed your uncle Jonathan stating that Purdue was in, quote, a death spiral. Jonathan Sackler then responded with, we've taken a fantastic amount of money out of the company, end quote.
MaloneyMr. Sackler, do you agree that the billions of dollars that Purdue transferred to your family and the companies that your family controls after 2008 left less money for future plaintiffs or creditors? Yes or no?
David SacklerMa'am, I think you've mischaracterized that email, it's my belief. And I believe the distribution----
MaloneyMr. Sackler, how many shell companies do you and your family control?
David SacklerMa'am, I cannot speak for our entire family, but I--based on what I know of the transfers that you're referring to, I believe Mortimer has stated or would state if he were here, that those were all appropriate, documented, and disclosed.
MaloneyWell, in this case, the question was, how many shell companies do you and your family control? If you don't know the answer, can you commit to getting that information to the committee?
David SacklerWell, I--I--that's really a question for the lawyers. We're involved in a confidential mediation. I believe the families----
MaloneyThen let the lawyers get back to the committee with the answer. How much of your family's wealth is currently in foreign bank accounts?
David SacklerOf our family's wealth? I don't believe--a very small amount, if any.
[Hearing transcript, December 17, 2020, questioning by Chairwoman Maloney.]
Who committed the crimes
MaloneyBut now I'd like to turn to Dr. Landau next. Just last month in your settlement with the Justice Department, your company pleaded guilty to conspiracy to defraud the U.S. Government, misbranding of OxyContin, and illegal kickbacks. You pleaded guilty to criminal charges. Who committed these crimes? Which individuals at Purdue committed those crimes? Mr. Landau.
LandauThank you for the question, Chairperson Maloney. You're correct, the company pled guilty in U.S.--U.S. district court to three felonies for specific crimes it committed during a specific period. And we're taking full accountability and responsibility for those crimes. We have over $8 billion of fines and penalties issued to us. We have a commitment for ongoing cooperation with the Department of Justice and a commitment to create a public repository for all documents deemed relevant so that the American people can see for themselves what did or did not occur.
MaloneyThank you. But that's not the question I asked. I asked, who committed the crimes? We know that there were crimes. Who committed them? All kinds of crimes. And I'm sorry, you're the CEO of the company and you've pleaded guilty to crimes, and you're now telling me by not answering the question that you don't know who actually committed those crimes. If you don't know who committed those crimes, then you can't be sure that they're no longer working for Purdue.
MaloneyIn light of all of this, Mr. Sackler and Dr. Sackler, I'd like to ask you one final question, and I'd like to begin with you, Dr. Sackler. Will you apologize to the American people for the role you played in the opioid crisis? Dr. Sackler.
Kathe SacklerI would be happy to apologize to the American people for all of the pain they have suffered and for the tragedies that they've experienced in their families and--and I thought I did that earlier in my opening comments. That was my intention. I also am very angry. I'm angry that some people working at Purdue broke the law. I'm angry about it from 2007, and I'm angry about it now again in 2020. It's--it's--I think that----
MaloneyI know you're angry. And I'm sorry, but that's not the apology we were looking for. You've apologized for the pain people have suffered, but you've never apologized for the role that you played in the opioid crisis. So, I'll ask you again, will you apologize for the role you played in the opioid crisis?
Kathe SacklerI have struggled with that question. I have asked myself over many years. I have tried to figure out, was--is there anything that I could have done differently, knowing what I knew then, not what I know now. And I have to say, I can't--there's nothing that I can find that I would have done differently, based on what I believed and understood then and what I learned from management in the reports to the board and what I learned from my colleagues on the board. And it is extremely distressing. And it's----
MaloneyMr. Sackler, will you apologize for the role that you played in the opioid crisis?
David SacklerI echo much of what my cousin said. But I will say to the American people, I am deeply and profoundly sorry that OxyContin has played a role in any addiction and death. I believe I conducted myself legally and ethically, and I believe the full record will demonstrate that. I still feel absolutely terrible that a product created to help, that has helped so many people, has also been associated with death and addiction.
[Hearing transcript, December 17, 2020, questioning by Chairwoman Maloney.]
The balance sheet
Representative Kelly Armstrong, a Republican and a former criminal defense lawyer, had brought the sales figures.
Armstrong2007, Department of Justice concluded a prosecution on Purdue Pharma. Pled guilty to five years' probation, $634.5 million in fines. Mr. Sackler, approximately, in 2007, what was the sale--what was the number of sales for OxyContin?
David SacklerI don't remember the exact----
ArmstrongIt's about a billion bucks. Do you know what happened to the sales of OxyContin after you pled guilty in Federal court?
David SacklerI believe----
Armstrong2008, $2.2 billion; 2009, just under $3 billion; 2010, over $3 billion; 2011, under $3 billion; 2012, about $2.7 billion; 2013, $2.6 billion; 2014, $2.4 billion. Ms. Sackler, you wanted to ask what you could've done differently? Look at your own damn balance sheet. The day after you pled--the year after you pled guilty, you say you didn't know what was going on--you knew what had happened. And pursuant to a bankruptcy audit, from 1995 to 2007, you withdrew $1.3 billion from Purdue Pharma. You just testified that about 90 percent of your profit out of Purdue Pharma was from OxyContin. Do you know the number you withdrew from 2008 to 2018, Mr. Sackler, as a family?
David SacklerI believe it's approximately $10 billion.
ArmstrongIt's about $10.7 billion. Ninety percent of that was related to OxyContin?
David SacklerI believe that's approximately right. And, of that money, about half was paid in taxes.
ArmstrongFantastic. Thank you for that. We appreciate--as people who fund the government, from a taxpayer, we really do appreciate that. So, my question is, do you have cable?
David SacklerI do have cable, yes.
ArmstrongDo you get newspapers?
David SacklerNo, I don't receive subscriptions to newspapers. I see--I get my news online.
ArmstrongI was practicing criminal defense at the time all this was going on, and I don't--I wish we could have every one of these companies in here at every different way. But I think it goes beyond the pale of believability to think that, after settling with the Federal Government in 2007, you can honestly say, watching the sales of your own company's drugs, that you didn't know a problem was coming down the pipe. And to say that just defies believability and is absolutely abhorrent and appalling to the victims of opioid addiction.
ArmstrongIf one of my clients were to sell--sold five pills of OxyContin on the street and got tied up in Federal court, you know what their criminal penalty is? It's a 10-year minimum mandatory sentence in Federal court.
[Hearing transcript, December 17, 2020, questioning by Rep. Armstrong.]