Sunday, October 22, 2017
The Secretive Family Making Billions From the Opioid Crisis
You’re aware America is under siege, fighting an opioid crisis that has exploded into a public-health emergency. You’ve heard of OxyContin, the pain medication to which countless patients have become addicted. But do you know that the company that makes Oxy and reaps the billions of dollars in profits it generates is owned by one family?
Oct 16, 2017
The newly installed Sackler Courtyard at London’s Victoria and Albert Museum is one of the most glittering places in the developed world. Eleven thousand white porcelain tiles, inlaid like a shattered backgammon board, cover a surface the size of six tennis courts. According to the V&A’s director, the regal setting is intended to serve as a “living room for London,” by which he presumably means a living room for Kensington, the museum’s neighborhood, which is among the world's wealthiest. In late June, Kate Middleton, the Duchess of Cambridge, was summoned to consecrate the courtyard, said to be the earth's first outdoor space made of porcelain; stepping onto the ceramic expanse, she silently mouthed, “Wow.”
The Sackler Courtyard is the latest addition to an impressive portfolio. There’s the Sackler Wing at New York’s Metropolitan Museum of Art, which houses the majestic Temple of Dendur, a sandstone shrine from ancient Egypt; additional Sackler wings at the Louvre and the Royal Academy; stand-alone Sackler museums at Harvard and Peking Universities; and named Sackler galleries at the Smithsonian, the Serpentine, and Oxford’s Ashmolean. The Guggenheim in New York has a Sackler Center, and the American Museum of Natural History has a Sackler Educational Lab. Members of the family, legendary in museum circles for their pursuit of naming rights, have also underwritten projects of a more modest caliber—a Sackler Staircase at Berlin’s Jewish Museum; a Sackler Escalator at the Tate Modern; a Sackler Crossing in Kew Gardens. A popular species of pink rose is named after a Sackler. So is an asteroid.
The Sackler name is no less prominent among the emerald quads of higher education, where it’s possible to receive degrees from Sackler schools, participate in Sackler colloquiums, take courses from professors with endowed Sackler chairs, and attend annual Sackler lectures on topics such as theoretical astrophysics and human rights. The Sackler Institute for Nutrition Science supports research on obesity and micronutrient deficiencies. Meanwhile, the Sackler institutes at Cornell, Columbia, McGill, Edinburgh, Glasgow, Sussex, and King’s College London tackle psychobiology, with an emphasis on early childhood development.
The Sacklers’ philanthropy differs from that of civic populists like Andrew Carnegie, who built hundreds of libraries in small towns, and Bill Gates, whose foundation ministers to global masses. Instead, the family has donated its fortune to blue-chip brands, braiding the family name into the patronage network of the world’s most prestigious, well-endowed institutions. The Sackler name is everywhere, evoking automatic reverence; the Sacklers themselves, however, are rarely seen.
The descendants of Mortimer and Raymond Sackler, a pair of psychiatrist brothers from Brooklyn, are members of a billionaire clan with homes scattered across Connecticut, London, Utah, Gstaad, the Hamptons, and, especially, New York City. It was not until 2015 that they were noticed by Forbes, which added them to the list of America’s richest families. The magazine pegged their wealth, shared among twenty heirs, at a conservative $14 billion. (Descendants of Arthur Sackler, Mortimer and Raymond’s older brother, split off decades ago and are mere multi-millionaires.) To a remarkable degree, those who share in the billions appear to have abided by an oath of omertà: Never comment publicly on the source of the family’s wealth.
That may be because the greatest part of that $14 billion fortune tallied by Forbes came from OxyContin, the narcotic painkiller regarded by many public-health experts as among the most dangerous products ever sold on a mass scale. Since 1996, when the drug was brought to market by Purdue Pharma, the American branch of the Sacklers’ pharmaceutical empire, more than two hundred thousand people in the United States have died from overdoses of OxyContin and other prescription painkillers. Thousands more have died after starting on a prescription opioid and then switching to a drug with a cheaper street price, such as heroin. Not all of these deaths are related to OxyContin—dozens of other painkillers, including generics, have flooded the market in the past thirty years. Nevertheless, Purdue Pharma was the first to achieve a dominant share of the market for long-acting opioids, accounting for more than half of prescriptions by 2001.
According to the Centers for Disease Control, fifty-three thousand Americans died from opioid overdoses in 2016, more than the thirty-six thousand who died in car crashes in 2015 or the thirty-five thousand who died from gun violence that year. This past July, Donald Trump’s Commission on Combating Drug Addiction and the Opioid Crisis, led by New Jersey governor Chris Christie, declared that opioids were killing roughly 142 Americans each day, a tally vividly described as “September 11th every three weeks.” The epidemic has also exacted a crushing financial toll:
According to a study published by the American Public Health Association, using data from 2013—before the epidemic entered its current, more virulent phase—the total economic burden from opioid use stood at about $80 billion, adding together health costs, criminal-justice costs, and GDP loss from drug-dependent Americans leaving the workforce. Tobacco remains, by a significant multiple, the country’s most lethal product, responsible for some 480,000 deaths per year. But although billions have been made from tobacco, cars, and firearms, it’s not clear that any of those enterprises has generated a family fortune from a single product that approaches the Sacklers’ haul from OxyContin.
Even so, hardly anyone associates the Sackler name with their company’s lone blockbuster drug. “The Fords, Hewletts, Packards, Johnsons—all those families put their name on their product because they were proud,” said Keith Humphreys, a professor of psychiatry at Stanford University School of Medicine who has written extensively about the opioid crisis. “The Sacklers have hidden their connection to their product. They don’t call it ‘Sackler Pharma.’ They don’t call their pills ‘Sackler pills.’ And when they’re questioned, they say, ‘Well, it’s a privately held firm, we’re a family, we like to keep our privacy, you understand.’ ”
To the extent that the Sacklers have cultivated a reputation, it’s for being earnest healers, judicious stewards of scientific progress, and connoisseurs of old and beautiful things. Few are aware that during the crucial period of OxyContin’s development and promotion, Sackler family members actively led Purdue’s day-to-day affairs, filling the majority of its board slots and supplying top executives. By any assessment, the family’s leaders have pulled off three of the great marketing triumphs of the modern era: The first is selling OxyContin; the second is promoting the Sackler name; and the third is ensuring that, as far as the public is aware, the first and the second have nothing to do with one another.
If you head north on I-95 through Stamford, Connecticut, you will spot, on the left, a giant misshapen glass cube. Along the building’s top edge, white lettering spells out ONE STAMFORD FORUM. No markings visible from the highway indicate the presence of the building’s owner and chief occupant, Purdue Pharma.
Originally known as Purdue Frederick, the first iteration of the company was founded in 1892 on New York’s Lower East Side as a peddler of patent medicines. For decades, it sustained itself with sales of Gray’s Glycerine Tonic, a sherry-based liquid of “broad application” marketed as a remedy for everything from anemia to tuberculosis. The company was purchased in 1952 by Arthur Sackler, thirty-nine, and was run by his brothers, Mortimer, thirty- six, and Raymond, thirty-two. The Sackler brothers came from a family of Jewish immigrants in Flatbush, Brooklyn. Arthur was a headstrong and ambitious provider, setting the tone—and often choosing the path—for his younger brothers. After attending medical school on Arthur’s dime, Mortimer and Raymond followed him to jobs at the Creedmoor psychiatric hospital in Queens. There, they coauthored more than one hundred studies on the biochemical roots of mental illness. The brothers’ research was promising—they were among the first to identify a link between psychosis and the hormone cortisone—but their findings were mostly ignored by their professional peers, who, in keeping with the era, favored a Freudian model of mental illness.
Concurrent with his psychiatric work, Arthur Sackler made his name in pharmaceutical advertising, which at the time consisted almost exclusively of pitches from so-called “detail men” who sold drugs to doctors door-to-door. Arthur intuited that print ads in medical journals could have a revolutionary effect on pharmaceutical sales, especially given the excitement surrounding the “miracle drugs” of the 1950s—steroids, antibiotics, antihistamines, and psychotropics. In 1952, the same year that he and his brothers acquired Purdue, Arthur became the first adman to convince The Journal of the American Medical Association, one of the profession’s most august publications, to include a color advertorial brochure.
In the 1960s, Arthur was contracted by Roche to develop an advertising strategy for a new antianxiety medication called Valium. This posed a challenge, because the effects of the medication were nearly indistinguishable from those of Librium, another Roche tranquilizer that was already on the market. Arthur differentiated Valium by audaciously inflating its range of indications. Whereas Librium was sold as a treatment for garden- variety anxiety, Valium was positioned as an elixir for a problem Arthur christened “psychic tension.” According to his ads, psychic tension, the forebear of today’s “stress,” was the secret culprit behind a host of somatic conditions, including heartburn, gastrointestinal issues, insomnia, and restless-leg syndrome. The campaign was such a success that for a time Valium became America’s most widely prescribed medication—the first to reach more than $100 million in sales. Arthur, whose compensation depended on the volume of pills sold, was richly rewarded, and he later became one of the first inductees into the Medical Advertising Hall of Fame.
As Arthur’s fortune grew, he turned his acquisitive instincts to the art market, quickly amassing the world’s largest private collection of ancient Chinese artifacts. According to a memoir by Marietta Lutze, his second wife, collecting, exhibiting, owning, and donating art fed Arthur’s “driving necessity for prestige and recognition.” Rewarding at first, collecting soon became a mania that took over his life. “Boxes of artifacts of tremendous value piled up in numerous storage locations,” she wrote, “there was too much to open, too much to appreciate; some objects known only by a packing list.” Under an avalanche of “ritual bronzes and weapons, mirrors and ceramics, inscribed bones and archaic jades,” their lives were “often in chaos.” “Addiction is a curse,” Lutze noted, “be it drugs, women, or collecting.”
When Arthur donated his art and money to museums, he often imposed onerous terms. According to a memoir written by Thomas Hoving, the Met director from 1967 to 1977, when Arthur established the Sackler Gallery at the Metropolitan Museum of Art to house Chinese antiquities, in 1963, he required the museum to collaborate on a byzantine tax-avoidance maneuver. In accordance with the scheme, the museum first sold Arthur a large quantity of ancient artifacts at the deflated 1920s prices for which they had originally been acquired. Arthur then donated back the artifacts at 1960s prices, in the process taking a tax deduction so hefty that it likely exceeded the value of his initial donation.
Three years later, in connection with another donation, Arthur negotiated an even more unusual arrangement. This time, the Met opened a secret chamber above the museum’s auditorium to provide Arthur with free storage for some five thousand objects from his private collection, relieving him of the substantial burden of fire protection and other insurance costs. (In an email exchange, Jillian Sackler, Arthur’s third wife, called Hoving’s tax-deduction story “fake news.” She also noted that New York’s attorney general conducted an investigation into Arthur’s dealings with the Met and cleared him of wrongdoing.)
In 1974, when Arthur and his brothers made a large gift to the Met—$3.5 million, to erect the Temple of Dendur—they stipulated that all museum signage, catalog entries, and bulletins referring to objects in the newly opened Sackler Wing had to include the names of all three brothers, each followed by “M.D.” (One museum official quipped, “All that was missing was a note of their office hours.”)
Hoving said that the Met hoped that Arthur would eventually donate his collection to the museum, but over time Arthur grew disgruntled over a series of rankling slights. For one, the Temple of Dendur was being rented out for parties, including a dinner for the designer Valentino, which Arthur called “disgusting.” According to Met chronicler Michael Gross, he was also denied that coveted ticket of arrival, a board seat. (Jillian Sackler said it was Arthur who rejected the board seat, after repeated offers by the museum.) In 1982, in a bad breakup with the Met, Arthur donated the best parts of his collection, plus $4 million, to the Smithsonian in Washington, D. C.
Arthur's younger brothers, Mortimer and Raymond, looked so much alike that when they worked together at Creedmoor, they fooled the staff by pretending to be one another. Their physical similarities did not extend to their personalities, however. Tage Honore, Purdue’s vice-president of discovery of research from 2000 to 2005, described them as “like day and night.” Mortimer, said Honore, was “extroverted—a ‘world man,’ I would call it.” He acquired a reputation as a big-spending, transatlantic playboy, living most of the year in opulent homes in England, Switzerland, and France. (In 1974, he renounced his U. S. citizenship to become a citizen of Austria, which infuriated his patriotic older brother.) Like Arthur, Mortimer became a major museum donor and married three wives over the course of his life.
Mortimer had his own feuds with the Met. On his seventieth birthday, in 1986, the museum agreed to make the Temple of Dendur available to him for a party but refused to allow him to redecorate the ancient shrine: Together with other improvements, Mortimer and his interior designer, flown in from Europe, had hoped to spiff up the temple by adding extra pillars. Also galling to Mortimer was the sale of naming rights for one of the Sackler Wing’s balconies to a donor from Japan. “They sold it twice,” Mortimer fumed to a reporter from New York magazine. Raymond, the youngest brother, cut a different figure—“a family man,” said Honore. Kind and mild-mannered, he stayed with the same woman his entire life. Lutze concluded that Raymond owed his comparatively serene nature to having missed the worst years of the Depression. “He had summer vacations in camp, which Arthur never had,” she wrote. “The feeling of the two older brothers about the youngest was, ‘Let the kid enjoy himself.’ ”
Raymond led Purdue Frederick as its top executive for several decades, while Mortimer led Napp Pharmaceuticals, the family’s drug company in the UK. (In practice, a family spokesperson said, “the brothers worked closely together leading both companies.”) Arthur, the adman, had no official role in the family’s pharmaceutical operations. According to Barry Meier’s Pain Killer, a prescient account of the rise of OxyContin published in 2003, Raymond and Mortimer bought Arthur’s share in Purdue from his estate for $22.4 million after he died in 1987. In an email exchange, Arthur’s daughter Elizabeth Sackler, a historian of feminist art who sits on the board of the Brooklyn Museum and supports a variety of progressive causes, emphatically distanced her branch of the family from her cousins’ businesses. “Neither I, nor my siblings, nor my children have ever had ownership in or any benefit whatsoever from Purdue Pharma or OxyContin,” she wrote, while also praising “the breadth of my father’s brilliance and important works.” Jillian, Arthur’s widow, said her husband had died too soon: “His enemies have gotten the last word.”
The Sacklers have been millionaires for decades, but their real money—the painkiller money—is of comparatively recent vintage. The vehicle of that fortune was OxyContin, but its engine, the driving power that made them so many billions, was not so much the drug itself as it was Arthur’s original marketing insight, rehabbed for the era of chronic-pain management. That simple but profitable idea was to take a substance with addictive properties—in Arthur’s case, a benzo; in Raymond and Mortimer’s case, an opioid—and market it as a salve for a vast range of indications.
In the years before it swooped into the pain-management business, Purdue had been a small industry player, specializing in over-the-counter remedies like ear-wax remover and laxatives. Its most successful product, acquired in 1966, was Betadine, a powerful antiseptic purchased in industrial quantities by the U. S. government to prevent infection among wounded soldiers in Vietnam. The turning point, according to company lore, came in 1972, when a London doctor working for Cicely Saunders, the Florence Nightingale of the modern hospice movement, approached Napp with the idea of creating a timed-release morphine pill. A long-acting morphine pill, the doctor reasoned, would allow dying cancer patients to sleep through the night without an IV. At the time, treatment with opioids was stigmatized in the United States, owing in part to a heroin epidemic fueled by returning Vietnam veterans. “Opiophobia,” as it came to be called, prevented skittish doctors from treating most patients, including nearly all infants, with strong pain medication of any kind. In hospice care, though, addiction was not a concern: It didn’t matter whether terminal patients became hooked in their final days. Over the course of the seventies, building on a slow-release technology the company had already developed for an asthma medication, Napp created what came to be known as the “Contin” system. In 1981, Napp introduced a timed-release morphine pill in the UK; six years later, Purdue brought the same drug to market in the U. S. as MS Contin.
MS Contin quickly became the gold standard for pain relief in cancer care. At the same time, a number of clinicians associated with the burgeoning chronic-pain movement started advocating the use of powerful opioids for noncancer conditions like back pain and neuropathic pain, afflictions that at their worst could be debilitating. In 1986, two doctors from Memorial Sloan Kettering hospital in New York published a fateful article in a medical journal that purported to show, based on a study of thirty-eight patients, that long-term opioid treatment was safe and effective so long as patients had no history of drug abuse. Soon enough, opioid advocates dredged up a letter to the editor published in The New England Journal of Medicine in 1980 that suggested, based on a highly unrepresentative cohort, that the risk of addiction from long-term opioid use was less than 1 percent. Though ultimately disavowed by its author, the letter ended up getting cited in medical journals more than six hundred times.
As the country was reexamining pain, Raymond’s eldest son, Richard Sackler, was searching for new applications for Purdue’s timed-release Contin system. “At all the meetings, that was a constant source of discussion—‘What else can we use the Contin system for?’ ” said Peter Lacouture, a senior director of clinical research at Purdue from 1991 to 2001. “And that’s where Richard would fire some ideas—maybe antibiotics, maybe chemotherapy—he was always out there digging.” Richard’s spitballing wasn’t idle blather. A trained physician, he treasured his role as a research scientist and appeared as an inventor on dozens of the company’s patents (though not on the patents for OxyContin). In the tradition of his uncle Arthur, Richard was also fascinated by sales messaging. “He was very interested in the commercial side and also very interested in marketing approaches,” said Sally Allen Riddle, Purdue’s former executive director for product management. “He didn’t always wait for the research results.” (A Purdue spokesperson said that Richard “always considered relevant scientific information when making decisions.”)
Perhaps the most private member of a generally secretive family, Richard appears nowhere on Purdue’s website. From public records and conversations with former employees, though, a rough portrait emerges of a testy eccentric with ardent, relentless ambitions. Born in 1945, he holds degrees from Columbia University and NYU Medical School. According to a bio on the website of the Koch Institute for Integrative Cancer Research at MIT, where Richard serves on the advisory board, he started working at Purdue as his father’s assistant at age twenty-six before eventually leading the firm’s R&D division and, separately, its sales and marketing division. In 1999, while Mortimer and Raymond remained Purdue’s co-CEOs, Richard joined them at the top of the company as president, a position he relinquished in 2003 to become cochairman of the board. The few publicly available pictures of him are generic and sphinxlike—a white guy with a receding hairline. He is one of the few Sacklers to consistently smile for the camera. In a photo on what appears to be his Facebook profile, Richard is wearing a tan suit and a pink tie, his right hand casually scrunched into his pocket, projecting a jaunty charm. Divorced in 2013, he lists his relationship status on the profile as “It’s complicated.”