YouTube video

Sackler and PurduePharma profited from “suffering and death,” NYC AG Letitia James says. White collar criminologist Bill Black discusses the case

Story Transcript

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.

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.