NEW: NY AG Alleging RI Company Used By Sacklers to Move Millions to Family Controlled Trusts

NEW: NY AG Alleging RI Company Used By Sacklers to Move Millions to Family Controlled Trusts

On Thursday, New York Attorney General Letitia James dropped a bombshell as she filed the nation’s most extensive lawsuit against Purdue Pharma opioid manufacturers, the Sackler Family, for their role “in the opioid epidemic that has taken hundreds of thousands of lives and devastated families and communities.”

The billionaire Sackler family allegedly transferred funds from Purdue Pharma and the affiliated Rhode Island-based generic manufacturing company drugmaker Rhodes Pharmaceuticals LP into various entities that family members control through trusts, according to the amended lawsuit.

Rhodes Technology is located in Coventry RI.

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The New York complaint alleges that a senior manager at Purdue called Rhodes a “landing pad” for Purdue “to prepare for the possibility that they would need to start afresh following the crisis then engulfing OxyContin.”

According to the 269-page complaint, “In 2007, Richard Sackler applied for a patent to treat opioid addiction. He finally received it in January 2018 and assigned it to Rhodes, a different company controlled by the Sackler family, instead of Purdue. Richard’s patent application says opioids are addictive. The application calls the people who become addicted to opioids “junkies” and asks for a monopoly on a method of treating addiction.”

The suit alleges, “Purdue and the Sacklers oversaw and approved all Rhodes-related activity. The Sacklers received the agendas for Rhodes Pharma and Rhodes Tech board of directors’ meetings in addition to Rhodes’ financial statements and financial results. Some of the individual Sackler Defendants served on Rhodes’ committees. For example, in 2015, Theresa Sackler (Chairperson), Kathe Sackler, and Jonathan Sackler served on Rhodes’ Governance committee. And in 2017, Rhodes’ Business Development Committee included individual Sackler Defendants Kathe Sackler, Jonathan Sackler, Mortimer Sackler, and David Sackler. In 2018, defendant Richard Sackler was listed on Rhodes’ patent for a drug to treat opioid addiction and further profit from the opioid crisis the Sackler Families created. Rhodes relied on Purdue for compliance; for example, in 2018, Rhodes’ Compliance Committee discussed the suspicious ordering system and statistics for 2018 as provided by Purdue. Rhodes also made distributions to defendants Rosebay Medical L.P. and the Beacon Company in the millions, for the benefit of the Sackler Families.”

Jonathan Sackler and his wife Mary Corson have been major donors to Governor Gina Raimondo and she has repeatedly refused to return or donate the $12,500 in donations she has received from the couple.

And, according to the  complaint, Rhodes is an even larger manufacturer of opioids than Purdue, “According to the Financial Times, in 2016, Rhodes had a substantially larger share of prescriptions in the U.S. prescription opioid market than Purdue.”

Specifically, the complaint alleges that the opioid epidemic is “especially destructive to New York because of the fraud, willful misconduct, and gross negligence of the distributors who buy controlled substances in bulk from the manufacturers and sell to individual pharmacies and other licensed dispensers. These systemic failures led to massive shipments of opioids to specific pharmacies in New York that showed numerous “red flags,” such as a high percentage of prescriptions paid for in cash or written by a relatively small number of  providers who have been charged with, or convicted of, illegal prescribing,”said the New York Attorney General’s office.

Deception and Fraud

Further, “the complaint also alleges that manufacturers implemented a common “playbook” to mislead the public about the safety, efficacy, and risks of their prescription opioids. Manufacturers pushed claims that opioids could improve quality of life and cognitive functioning, promoted false statements about the non-addictive nature of these drugs, masked signs of addiction by referring to them as “pseudoaddiction” and encouraged greater opioid use to treat it, and suggested that alternative pain relief methods were riskier than opioids, among other grossly misleading claims. They utilized a vast network of sales representatives (“detailers”) to push these dangerous narratives and to target susceptible doctors, flood publications with their deceptive advertisements, and offer consumers discount cards and other incentives to entice them to request treatment with their products. “ 

“Opioid dependency and related overdoses are a public health crisis that must be tackled from every angle,” said Joshua D. Lee MD, MSc, Associate Professor of Population Health and Medicine/General Internal Medicine and Clinical Innovation at the NYU School of Medicine and Director of the NYU Fellowship in Addiction Medicine. “As we seek to find the best interventions for opioid use disorders, those who fueled this crisis, marketing useful but addictive drugs into the market without disclosing the risks, must be held responsible. I thank Attorney General Letitia James for taking this bold action so we can beat this epidemic.”   

“The opioid crisis has had a devastating impact on our state – each day, we treat hundreds of New Yorkers and their families struggling with addiction,” said Gary Butchen, LCSWR, CASAC, SAP; Executive Director, Bridge Back to Life Center, Inc. “In 30 years of providing services, we have seen an exponential increase this decade in patients seeking assistance for opioid addiction compared to alcohol and other drugs. With Attorney General Letitia James’ lawsuit, those who made these lethal, addictive drugs so widely available may finally be held accountable.” 

The lawsuit alleges that through years of false and deceptive marketing, and by ignoring their duties to prevent the unlawful diversion of controlled substances, these six national prescription opioid manufacturers, the Sackler Family, and four national prescription drug distributors are largely responsible for creating the opioid epidemic that has ravaged New York, causing widespread addiction, overdose deaths, and suffering.

This story was first published 3/28/19 2:30 PM