New York Sues Big Pharma for Opioid Crisis

Yves here. In this Real News Network interview, Bill Black gives a high-level overview of the New York case against not just opioid profiteers, the Sackler family and their companies, but also other key participants, like “pain doctors” who were tied in to the Sackers’ marketing efforts.

MARC STEINER: Not only do they manufacture the opioids, and not only do they lie to physicians about their addictive nature, they’ve also profited off of addiction treatment. And now, the New York A.G. has them in her sights.

I’m Marc Steiner and welcome to The Real News. Good to have you with us. We recently covered the accusations against the Sackler family and their company Purdue Pharma for their role in fueling the opioid addiction crisis. It has only intensified since our last conversation. Now with New York Attorney General Letitia James filing a complaint about systemic fraud not only on the part of the Sacklers, eight of whom are named in the complaint, but also a number of other companies that were in collusion to push opioids, fueling the addiction crisis, and attempting to profit off addiction recovery, as well. The Sacklers are held to have paid themselves hundreds of millions of dollars now held offshore and face lawsuits from a number of states and apparently, thousands of individuals as well. We’re joined once again by Bill Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City, white-collar criminologist, former financial regulator, author of the book The Best Way to Rob a Bank Is to Own One, and of course, a regular contributor here at The Real News. Bill, welcome back. Good to have you with us.

BILL BLACK: Thank you.

MARC STEINER: So let’s just begin with this. Let’s start with this first piece that we have and hear this for our listeners to watch, to view, and us to talk about.

NEWS CLIP: Opioids, like oxycodone and hydrocodone, are highly addictive. Purdue changed that perception through a devious but very effective marketing campaign that attempted to persuade physicians of all specialties that this hundred plus years of medical wisdom was just wrong.

MARC STEINER: So his is where it all began, but this now is really unfolding into being a much more complex case. Give us a bit of background as a former regulator, somebody who follows this, with a bit about what this background means, and where it’s leading us.

BILL BLACK: Sure. So highly addictive substances that in small quantities can kill you, are obviously something that should be treated with enormous care, and should be prescribed only in unusual circumstances, and should be extraordinarily closely monitored. But of course, you don’t make anywhere near as much money as the drug manufacturer if that’s true. So the drug manufacturers got together with the pain doctors, not all of them but some entrepreneurs, and they tried to change that perception. So one thing they ginned up was a fake study. It was not peer-reviewed. It was not scientific in any way. They looked at about 30 folks and they said look, we don’t see addiction. And so, they actually conned the F.D.A. for a time into allowing a statement that says, “if used as prescribed, is not addictive.” In fact, it was quite addictive when used as prescribed. And of course, it’s often used not as prescribed and it’s extraordinarily addictive in those circumstances. Pain doctors started routinely asking you and they eventually trained general physicians, internal medicine types, to tell me on a scale of 1 to 10 how much pain you’re in. And then it became normal to give you this substance because after all, it wasn’t addictive. And it’s a very powerful high that it delivers in those circumstances. And so, this began the whole process of creating an addiction epidemic. And now, many years later, it is a leading cause of death in the United States, certainly preventable deaths. We get about 70,000 lives lost every year due to overdoses and roughly 40,000 of them are in opioids. And synthetic opioids, which are a next stage scam of all of this, are massively more powerful. And in the last about nine years, overdose deaths from them have been growing at over 70 percent annually. Together, this has meant these deaths are actually large enough that U.S. life expectancy has fallen. And it’s particularly true for men; they die of overdoses at over twice the rate of women. And it’s also geographically concentrated in the Midwest and Northeast.

MARC STEINER: In a lot of deindustrialized communities we should add, as well.

BILL BLACK: Yes, it is the drug of despair.

MARC STEINER: So let’s go to Letitia James, here, who is the newly-elected Attorney General. She outlines this new indictment and she really puts it to them. I think we need to talk about what this indictment means, and the depth that it could go, and the scope of this. Let’s watch this for a moment.

LETITIA JAMES: In an effort to address the very root of this crisis, today, my office filed the nation’s most extensive lawsuit against the very companies and the family behind them– those who make, distribute, and have misled the American people about the true dangers of these drugs. The following manufacturers of opioids: Purdue, Janssen, Mallinckrodt, Endo, Teva, and Allergan, have grossly misled the public about the true risks and dangers associated with opioids. Specifically, we’re looking for substantial payments from the defendants to fund an abatement program that will provide treatment to New Yorkers suffering from opioid use disorder and enable all corners of the state to step up their efforts aimed at prevention and education.

MARC STEINER: So this is really extensive. This has taken what we covered before, and the depth of this now, and it’s also broadened its reach. I mean, could this shake up the entire pharmaceutical industry? Is it just about the Sacklers? What do you think the import of this, and where could it go?

BILL BLACK: No, it’s certainly not just about the Sacklers. As I’ve said, it isn’t just big pharma; it’s also pain medicine specialists who have been working in league with big pharma for a good 20 years on creating this crisis. So, background: tobacco. It was eventually the massive suits by the government that turned the aspects of the tide in the fight against smoking.

MARC STEINER: Similar to what we’re watching now.

BILL BLACK: Right, but what we’re watching now is 30 states and nearly 1,500 cities bringing this litigation and that’s a very good thing. But people need to remember that the single most effective thing that broke the screen of lies by big tobacco, is when it was just individuals suing tobacco and won almost all the time and it succeeded in preventing discovery into its internal documents. It was when the federal government sued and brought a RICO, a civil RICO. RICO is Racketeer Influenced and Corrupt Organization. In other words, saying these are criminal enterprises, which is exactly what the tobacco companies are and exactly what these drug manufacturers are– criminal enterprises that simply appear to be legitimate. That discovery blew open the case entirely. It led to something like a 3,000-page opinion by the district court judge with all these findings of facts about how big tobacco hid everything. That allowed the state attorney generals, all that discovery, to bring these incredible actions that got the hundreds of billions of dollars in recovery and smoking abatement programs and smoking falls significantly and smoking deaths fall significantly as a result. Here, of course, the dog that isn’t barking is where the hell’s the federal government? Where the hell’s the Department of Justice?

Well it actually does have some actions but it’s not taking the lead the way it should. These attorney generals who have vastly fewer resources, vastly fewer resources in particular in elite white collar crime, are being forced to take the lead and the lead in discovery, but that discovery is bearing fruit. So we know, for example, that the Sackler family has been intimately involved despite their denials in how the companies are actual companies actually run. We know that they continuously put pressure to expand usage and profits. And we know that they disparage the victims as “druggies,” who basically deserved to die. It is a sickening story. And now that the Sackler family realizes it’s going to lose, and indeed has just done a major settlement, it’s afraid that this vast wealth that it has achieved by killing people, literally, is at risk. And so, the new suits quite appropriately say, the Sackler family is trying to hide the money by distributing it to these family trusts, which are usually very hard to sue and get money back from. So this is a very good vigorous action by the states. But it, of course, reflects very badly on the Sackler family.

MARC STEINER: Well let me just pull out one thing you said, one small comment you made about where is the federal government in these lawsuits. Where is the federal government in these lawsuits? Why isn’t the F.D.A. in the middle of all this? Why isn’t the Attorney General of the United States in the middle of this and U.S. attorneys? Why is it being done by the attorney generals of states across the country? What’s missing here?

BILL BLACK:Well what’s missing is exactly what you said. It isn’t that there are no actions by the Department of Justice and it isn’t that there haven’t been any efforts by the F.D.A., but the federal government is overall as I said, the dog that has not barked and it is by far the most powerful on both the regulatory side and the [litigation]. So the federal government winning the RICO action against the tobacco companies was a major change. It said, these are racketeering-influenced, corrupt organizations. They are criminal enterprises and that changed everything in how people looked at them. That’s what the federal government needs to be doing. It needs to be bringing a RICO action and only it has the resources and the expertise to do it effectively. And this is another case of now multiple administrations, the Obama administration and of course the Trump administration, where you go wait a minute, where the hell are the feds?

MARC STEINER: So the question I have, though, is why are they not there? Is this because of what people talk about in terms of the “revolving door” when it comes to the drug industry, the pharmaceutical industry, and the federal government, and regulatory agencies, and more? Is that a piece of what’s going on here?

BILL BLACK: Well it’s easy in terms of the Trump administration to explain. The Obama administration would say, well we did take some litigation efforts and we did take some restrictive steps at the F.D.A. and the C.D.C. and such, on how you should prescribe these drugs. And every time they’ve attempted to restrict, the drug companies come out with new, vastly more powerful drugs which are, of course, not supposed to be used for this purpose but it just so happens if you buy them and you crumble them up, oo-la-la! You have fentanyl. And so, the real question in some ways is why wasn’t the Obama administration willing to bring the RICO actions and put these folks out of business? And I have no good explanation for you. I think that, as you know, it was horrifically weak as well in suing the bankers. It’s just this unwillingness to sue people who wear nice suits that is destroying the country.

MARC STEINER:As we close here, there was an interesting piece inside the indictment itself that the Attorney General of New York put out, Letitia James. It was a diagram that we’re showing here of a funnel that actually came out of one of the documents from the Sackler family. And it was Dr. Cathy Sackler, one of the eight family members on the board who was named in this. It made this funnel showing an end-to-end pain provider so that it could devote immediate attention. They’re telling people on the company to devote immediate attention to this so they can get money out of both ends– addiction recovery and getting people addicted. If the things that are inside, and I’ve only read this [partially.] I haven’t had a chance to read the hundreds of pages yet, but I read a bunch of it. But if these allegations are true, then they were completely complicit in not only addicting people, getting doctors to addict more people even when doctors weren’t aware, as well as kind of manipulating the marketplace, and now, profiting off of addiction recovery to boot, and putting hundreds of million dollars offshore, a thing that thing cannot be touched. So if this unravels, again, let me take it back to where we began to close this out. What do you think could come of this?

BILL BLACK: Well what should come is that they should bankrupt all of these companies, get them out of the business, and sue the individuals to the ends of the earth and make sure that they don’t end up with any of the proceeds. As you say, if the documents are accurate, it’s one of the most depraved and cynical means of literally profiting from killing your customers. And remember, this is done all the time in tobacco. It was established, it was proved that that was the tobacco strategy. So why should we be surprised that it’s the strategy here?

MARC STEINER: Right. So basically in one sense, if capitalism itself is not kind of contained or regulated, it will maybe destroy itself with the rest of us along with it.

BILL BLACK: Again basically, global climate change is a suicide pact and we don’t just commit suicide as humans, we take most of the alleged advanced species with us.

MARC STEINER: Well, Bill Black, always a pleasure to talk with you. We’ll be talking about this again, I’m sure. Thank you so much for being with us all the time and bringing these to all of our viewers. Take care. Thank you.

BILL BLACK: Thank you.

MARC STEINER: And I’m Marc Steiner here for The Real News Network. You all take care. Thank you.

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  1. The Rev Kev

    Do people really want the the Trump administration, the Department of Justice and the F.D.A. involved here? Bit fuzzy on the details but wasn’t there a time about a decade ago when the States were getting together to sue banks for fraudulently marketing mortgages but that Obama got ahead of this movement and basically short-circuited the whole process? And the banks got a tap on the wrist as they were busy seizing homes by the millions?
    If the Trump administration got involved, I would expect that Big Pharma would have to pay a few billion dollars restitution (which they, like the banks previously, could claim back on their taxes), that there would be no criminal sentences, that nobody would be convicted of a crime or have it on their record, and that Big Pharma would promise to behave better in future – starting February 30th. Meanwhile, another thousand Americans would be dying each and every week from what Big Pharma has created. Hopefully the States will create an almighty stink with their law suits.

    1. Cal2

      Who will Trump’s Kamala Harris be?
      (Mortgage fraud by banks versus Pharmafraud)

      Kamala did squat in the mortgage settlement as California attorney general. What little she did get was handed to Jerry Brown to resuscitate the general fund of the state, not to homeowners cheated out of their homes.

      She could have done what Scott Pruitt did in Oklahoma, which was to NOT accept the nationwide settlement. Oklahoma received 6x the national average in mortgage settlements because of that. “Chain of Title” by David Dayen.

      like Corey Booker’s pharma payoff, she got a nice donation for her next campaign for her probank activities, from Trump’s man Mnuchin himself.

      1. Pat

        Hey cut Kamala a break. My AG Schneiderman joined Obama’s sideswipe, got pennies for NY and didn’t end up in the Senate. She got more for CA, the bigger political payoff and even a run for president.

        And unfortunately Justice for those abused by the corporations who benefitted is not really in our political mainstream calculations.

  2. Juneau

    2 questions:
    1. who was it who made pain the “fifth vital sign”? blame the doctors fine but they were ordered to assess pain along with blood pressure, heart rate etc…with equal import back in 2000
    2. what happens to the settlement money if the state wins?

    I am glad the AG is taking this on and like the Cuomo drug laws as well. Still credibility traps abound here.

  3. timbers

    I just want to know one thing: How many Sacklers are going to jail and for how long?

    If NY wants to make the most of it’s limited resources (as Black notes) then why haven’t they issued arrest warrants for the Sackers and frozen their bank accounts?

    Seems to me a whole lot of folks with privilege and $$$ in the news who would have be arrested on the spot had someone else (like me for example) done the same thing but w/o all that privilege and $$$ (Zuckerburg, Boeing CEO, Sacklers).

    1. polecat

      As he looks straight into the jaws of villainy : “I think we’re gonna need a bigger floating prison …”

    2. Cal2

      Timbers, don’t know how old you are and how much you remember,
      but just look at what happened to Marc Rich under Bill Clinton for a clue how that will turn out.

    3. Paul P

      Yes, why aren’t they indicted? And why haven’t the forfeiture statutes been used to seize the company assets? The Sacker’s wealth from drug dealing: is that not proceeds of a crime?

      You drive drunk in NYC and the City can take your car. Little fish get reeled in. Big fish donate to the museum.

  4. Carl

    What I hope does not get entirely forgotten in this matter is the people who need relief from pain, yet can’t get the drugs they need because doctors are so afraid to prescribe effective pain-killers, except for extreme cases, like post-op or late-stage cancers. I’m told this is the situation in New York State. Elsewhere, too?

  5. Edward

    I wonder if the Sacklers could have gotten away with their crime if less people were killed. Suppose only 500 people were killed each year. Would the government have responded?

  6. orange cats

    Oh blah blah blah. Please notice what’s absent in these “conversations” about the “opioid” crisis. The recent increase in overdose deaths is due to the (often accidental) ingestion of street fetanyl as a result of prescription opioids being restricted.

    No one emphasizes the shocking absence of funding for mental health facilities; addiction research and the role of economic factors contributing to drug use; social safety nets for addicts and their children…in sum, WHY ARE SO MANY PEOPLE IN SO MUCH PAIN?
    In this country you have to be sprawled unconscious in the front seat of a running car to get any help, help being prison. Jailing the Sacklers isn’t going to change that one iota.

  7. GERMO

    The laboring class is largely being ground into hamburger. A condition of chronic, relentless pain that you can never get away from is the unchosen lifestyle for millions. That the treatment for pain (opioids) is also pretty good for despair is half an explanation for the epidemic. The other half, which is rarely mentioned, is that millions of people hurt all the time, physically or otherwise, and this is just collateral damage in the class struggle that we poor folks continue to lose.

    It’s sad that the process of justice against the monsters like the Sacklers will only result in more of that pain and suffering, and to know that they won’t in the end suffer much of anything at all. The handy myth of “overprescribing” will carry the day for the higher-status class of folks who’ve never had to contend with chronic pain conditions — conditions that come about mainly because we’re so prone to being worked like dogs by psychopath bosses.

    1. orange cats

      Thank you. I am disappointed that Bill Black and his “High-level interview” was boilerplate off-with-their-heads bunk. I admire him but do not understand why he is being recruited to opine on drug policy.

  8. BoyDownTheLane

    No one is going to mention the extensive and ongoing role of the US government and its intelligence apparatus [as documented in more than a few books] in the shipping, marketing and distribution of heroin? Or the opium lords whose names make up the backbone of East Coast wealth and secret societies that run most American institutions?

    1. Paul P

      Banks. Banks are necessary to the international, illegal drug
      trade. Never hear much discussion of banks as being integral to
      drug dealing. A fine gets imposed now and then.

  9. Cal2

    Lest they pull a Marc and Denise Rich, and flee to a country with no extradition treaty, the U.S. Attorney should seize the passports of the Sacklers and all the other CEOs of these corporations.

    President Trump, have these people, “in their nice suits” taken out in a perp walk in handcuffs.

    You will win extra massive number of votes from their victims of those people.

    p.s. Kudos to New York’s A.G., she’s got guts.

  10. kiers

    I wonder (REALLY WONDER) if the Sacklers do not have some kind of sweet-heart insurance contract that will handle THEIR (financial) “pain” with these “suits”. Funny how A.G.s lead the chivalrous charge to “clean up” wrong-doing WELL AFTER political cover ALLOWS them to go after the elite. Funny how that works eh? Cyrus Vance gets to add to his kitty.

  11. run75441

    There was a major study done on the use of Opioids conducted at Boston University Medical Center, Waltham MA. The result of that study were published in a brief letter to the NEMJ.

    “Recently, we examined our current files to determine the incidence of narcotic addiction in 39,946 hospitalized medical patients who were monitored consecutively. Although there were 11,882 patients who received at least one narcotic preparation, there were only four cases of reasonably well documented addiction in patients who had no history of addiction. The addiction was considered major in only one instance. The drugs implicated were meperidine in two patients, Percodan in one, and hydromorphone in one. We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction.” Jane Porter; Herschel Jick; MD Boston Collaborative Drug Surveillance Program, Boston University Medical Center, Waltham, MA.

    Note the key words here are: ” We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction.”

    This particular letter (or note as some may call it) to the NEJM was cited 608 times of which 491 times was in a positive manner about addiction being rare in medical patients. The 491 (~81%) citations fail to mention the patients given Opioids were in a hospital setting and grossly misrepresented the conclusions of the letter . 72.2% cited it as evidence that addiction was rare in patients treated with opioids.

    It took 37 years before another letter to the editor studied the impact of the misuse of that citation by doctors, Purdue Pharma, other Pharmaceutical Companies, etc. The authors accomplished a bibliometric analysis of the correspondence from its publication in 1980 until March 30, 2017. For each citation, two reviewers independently evaluated the portrayal of the article’s conclusions, using an adaptation of an established taxonomy of citation behavior4 along with other aspects of generalizability. The analysis which I have posted the resulting chart from it before can be found here:

    The Jick and Porter letter can be found here in the Supplemental Appendix along with various quotes by doctors:

    Ten years earlier or 2007, Purdue Pharma was fined $800 million by the courts after the DOJ sued them. Three executives were convicted and sentences. From 2006 to 2015 Opioid companies spent $800 million in a 50 state strategy. The mother of Cameron Weiss found out the power of Pharma the hard way when her push for new laws in New Mexico were defeated before a vote was even taken.

    In 1980 the death rate resulting from Opioid overdose was less than 1 per 100,000 and the overall death rate from Drugs was 1 per 100,000. With the introduction of OxyContin and the abuse of the Jick and Porter Letter, the death rate associated from Opioid Overdose increased to 1 per 100,000 one year later and doubled to 2 per 100,000 in 2 years. In 2015, it has soared to ~10 per 100,000.

    Without knowing what has led up to the abuse of Opioids the story has always been recreational use of drugs an Opioids has caused this epidemic without ever a mention of Purdue or the other drug companies. The explosion in the use of Opioids was very deliberate and the drug companies should be held responsible for it. Now with fewer Opioid pills being prescribed, people have moved on to Heroin and Opioid derivatives. The companies lit the fuse and left with their profits.

    The reason I wrote this long comment is I believe Bill Black gave this topic the short shrift. There is a lot of history on Opioid abuse and how it came to be.

  12. J C Bennett

    To Timbers – “why haven’t they issued arrest warrants?”

    Perhaps because of this: A defendant cannot be forced to testify in a criminal trial, or to answer any questions from law enforcement. However, a respondent can be made to answer questions in a civil action. Many times, civil actions are filed and tried first, then the information dragged out of the respondent during that process – now a part of the public record – can be used in a subsequent criminal trial.

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