Purdue owners illegally transferred profits from OxyContin, new lawsuit alleges
The Sackler family, which owns Purdue Pharma, illegally transferred billions of dollars in profits the drugmaker made from sales of the powerful painkiller OxyContin, according to a new lawsuit filed on Thursday by the New York Attorney General.
The suit also targets Purdue, Johnson & Johnson, Mallinckrodt and other companies for allegedly engaging in years of deceptive and false marketing of prescription opioid treatments.
It alleges that the firms “failed to exercise their duties to detect and report diversion of opioids through poorly designed, poorly resourced, and poorly executed suspicious order monitoring programs.”
“As the Sackler Family and the other defendants grew richer, New Yorkers’ health grew poorer and our state was left to foot the bill. The manufacturers and distributors of opioids are to blame for this crisis and it is past time they take responsibility,” AG Letitia James said in a statement.
Spokespersons for Johnson & Johnson and Mallinckrodt did not immediately respond to FOX Business' request for comment.
In a statement, the privately-held Purdue denied the allegations and said it would "continue to defend" against misleading claims.
"Such serious allegations demand clear evidence linking the conduct alleged to the harm described, but we believe the state fails to show such causation and offers little evidence to support its sweeping legal claims," the company said. "Instead, the state is seeking to publicly vilify Purdue and its former directors while unfairly undermining the important work we have taken to address the opioid crisis."
Through a spokesperson, the Sackler family called the lawsuit "baseless" and a "misguided attempt to place blame where it does not belong."
"We strongly deny these allegations, which are inconsistent with the factual record, and will vigorously defend against them," they said.
New York becomes the latest state to bring legal action to try to hold the drug industry accountable for what critics say is its role in spurring the opioid epidemic raging through the U.S.
In the suit, New York alleged that Purdue and the other firms "misleadingly suggested that other pain relief methods were riskier than opioids" and falsely claimed that opioid dependency could "be easily managed and effectively prevented."
The companies "spent millions of dollars over the following decade to push these fradulent messages," the suit reads.
It also claims the drugmakers knew there were inadequate systems in place to effectively monitor the distribution of its opioid treatments.
"Even though their customers were displaying a continuous parade of red flags indicating illegal activity, they continued to pour enormous volumes of opioid drugs into those customers' dispensaries," New York alleged.
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Purdue and the Sackler family settled earlier this week with the state of Oklahoma over a similar suit, allowing the company and its owners to avoid publicly testifying on claims that its allegedly illegal marketing tactics underpinned the sharp rise in abuse of painkillers.
As part of the settlement, Purdue will contribute $102.5 million to fund the creation of a new addicition studies center at Oklahoma State University. The Sackler family will also donate $75 million to the project.
Purdue is still facing over 1,600 lawsuits related to its role in the opioid epidemic and the Stamford, Connecticut-based company is reportedly weighing whether to file for bankruptcy to help settle the suits.