Big Pharma to Pay for Opioid Crisis, But What Happens to the Money?
Friday, August 30, 2019
RICHARD SACKLER: It was true that I was very gladdened to see an Oxycontin was meeting with such a strong positive reception.
SPEAKER: You were not aware at this time, were you? Or were you aware that your company was committing a felony in how they were marketing and branding the drug?
RICHARD SACKLER: I was not aware.
MARC STEINER: Welcome to The Real News Network. I’m Marc Steiner. Good to have you with us.
Well, we were all aware of the recently concluded trial in Cleveland County, Oklahoma where Johnson & Johnson was ordered to pay $572 million for its part in creating the opioid crisis. Oklahoma had already settled with other companies like Purdue Pharma, Teva Pharmaceuticals for $270 and $85 million respectively. And the largest civil suit in this country’s history seems to be taking place in Cleveland, Ohio, comprising over 2000 localities suing Purdue, Teva, Johnson & Johnson, McKesson, Cardinal Health, and AmerisourceBergen for their part in causing this opioid crisis that’s killed hundreds of thousands of people already.
And just yesterday, ProPublica, after all long legal battle, released a video of Richard Sackler–you just saw that, his testimony–as Purdue Pharma was being sued by Kentucky. That company declared bankruptcy, forcing the company to become a public trust to pay for the opioid crisis. OK. So those are the headlines. Most of us know those. But what does this teach us about the necessity to control capitalist companies, so they don’t commit crimes and hurt our people and our communities? What role did they consciously play in creating this opioid crisis? And that’s what we witnessed when hardly any of the money in the 1998 $246 billion settlement with big tobacco, hardly any of that money went to health needs or people’s needs at all. So how do we guarantee that these suits against pharmaceuticals will not also fund golf courses instead of the public need?
We’re going to explore that in this episode here at The Real News with Sam Pizzigati, who is an Associate Fellow at the Institute for Policy Studies in Washington DC, co-editor of Inequality.org, and author of The Case for a Minimum Wage, and a long time union man as well. And Sam, welcome. Good to have you with us.
SAM PIZZIGATI: Thank you. Good to be here.
MARC STEINER: We have a clip set up here, and this really goes to the first point I want to explore, which has to do with how you control companies and the greed and the avarice that comes with wanting to sell your product no matter what the cost to any of us. So just watch this piece. This is also from the depositions that took place in Kentucky.
SPEAKER: Do you believe Purdue’s marketing was overly aggressive?
RICHARD SACKLER: No.
SPEAKER: Do you believe Purdue’s marketing was appropriate?
RICHARD SACKLER: I believe so.
SPEAKER: The way the sales team was set up, if they sold more Oxycontin, they made more money basically?
RICHARD SACKLER: Yes, yes. The same as almost every other company in the industry.
SPEAKER: Do you know if reps that promoted and sold Oxycontin sometimes ended up making over $250,000 a year?
RICHARD SACKLER: I’ve heard that that is the case. I’m sure it was unusual.
SPEAKER: During the first five years of Oxycontin’s release, Purdue more than doubled the size of its sales force. Correct?
RICHARD SACKLER: That’s correct.
MARC STEINER: That’s correct. We see that now because ProPublica waged a huge battle to make those videos accessible to the public and publish them the other day. So Sam, let’s talk a bit about this. I mean, when you’re looking at big tobacco or the pharmaceuticals, this really is a battle about how you control corporations from doing what they’re going to do to increase their profits. Let’s talk a bit about that part of this; the struggle that we don’t talk about enough.
SAM PIZZIGATI: Well, yes, that’s absolutely the case. And when we look at that big tobacco settlement, since 1998, $125 billion has gone to states and localities to make up for the devastation that the tobacco industry caused. Only 3% of those billions has gone to actually fight tobacco abuse and to help people who have been damaged by it. That’s an incredible stat there. We need to prevent that from happening now with the opioid crisis and I think there are ways that we can move toward preventing that recurrence of what happened with big tobacco.
MARC STEINER: But the question is: How does that happen? I mean, one of the things that struck me in listening to all these news broadcasts and reading articles around this case is that I saw it mentioned several times, but nobody made a lot of it except for a New York Times editorial the other day where they would just say, “Well, Oklahoma will get this money, but they can use it for anything.” It just goes into the general coffers of that state. So there’s nothing to say that this is going to go to schools, it’s going to go to health care, it’s going to go to pay for people to fight their addictions, to fight the opioid crisis in general. So what do we have to do in terms of state campaigns, local campaigns, federal campaigns to ensure that these fines go to save society, to help society and not just into the coffers of politicians who will do what they will?
SAM PIZZIGATI: Well, I think there’s almost a bigger problem here. We need to prevent a recurrence of what we saw in tobacco, what we saw with the big financial industry in the 2008 meltdown, and what we’ve seen in Oxycontin. We have to go, and we have to get at the structure of corporate incentives. Right now, those who run our corporations, the CEOs of our corporations, can make tons, tons of rewards, tons of money by behaving badly. Outrageous rewards give executives an incentive to behave outrageously and we have to get at that incentive. That seems to me fundamentally important. And until we do that, then any sort of controls we put will always be end run by the executives who run these giant corporations.
MARC STEINER: So from your perspective, after all the work from these years, when you talk about these incentives, what does that mean in a practical sense? What kind of incentives do you give? What has to happen to kind of reign that in?
SAM PIZZIGATI: Well, let’s look at McKesson for a second. McKesson is one of the biggest distributors, has been one of the biggest distributors of opioids over the past 20 years. The CEO of McKesson, John Hammergren, recently retired. Over his 16 year career as CEO he made nearly $800 million. And he walked off, not to jail as he should have walked off to, but he walked off with a pay package worth $138.5 million. That’s the sort of incentives we have now in big pharma and in corporate America as a whole. And we need to do something about those incentives and there are things that we can do.
MARC STEINER: As in?
SAM PIZZIGATI: As in for instance, the CEO of Johnson & Johnson this past Monday just cut a settlement to give Oklahoma $572 million. The state was actually asking for $17.5 billion for the next 20 years. Last year, the CEO of Johnson & Johnson made $20.1 million. He made 268 times more than the typical worker at Johnson & Johnson. There’s now legislation pending at the federal level that would tax corporations at a higher rate if the CEO makes more than 100 times what their most typical workers are making, and there’s new legislation now being developed along this line. These are bills that can speak to the incentive structure of corporate America, that can take away the incentive to behave outrageously, the sort of behavior that we’ve seen in the opioid crisis.
MARC STEINER: These are the kind of things also that people who are in the progressive world need to kind of figure out, popularize, make people understand these are connected. What we’re watching with the opioid crisis now, and what’s happening to the Sacklers and others; this is how you can control it. I think we haven’t bridged that gap of understanding this point.
SAM PIZZIGATI: Yes. And until we reach that point of understanding, we’re going to experience all sorts of crises. We had the financial crisis, now we have the opioid crisis. We’ll have another one in another 5 or 10 years if we don’t do something about the incentive structure within corporate America.
MARC STEINER: So let’s take a look at this other clip. This has to do with the subterfuge I think that took place here. Let’s watch this.
SPEAKER: Were you aware that certain healthcare providers were being told that they could stop therapy abruptly without experiencing withdrawal symptoms and that patients who took Oxycontin would not develop tolerance to the drug?
RICHARD SACKLER: No.
SPEAKER: Okay. And that statement is false, correct?
RICHARD SACKLER: No, it’s not clear to me it’s false, but I am eager not to contend with it. But reading between the lines, as I suspect those who shaped this did and understood the government, I can accept it. But had I known about this, I would have alerted our attorneys who are negotiating this, that this ought to be a little bit more specific because it’s going to be difficult to agree with it the way it’s written.
MARC STEINER: “Not eager to contend with,” says Mr. Sackler.
SAM PIZZIGATI: Yeah, what gobbledygook that is.
MARC STEINER: I don’t know what he really said there, but what he said was, “Oh God, I’ve been caught. My hand’s in the cookie jar, and what can I say?” And when you top this off with also all the evidence about salespeople selling to doctors, not letting them know that this was more addictive than morphine itself. I mean, the outrage … These people actually knew what they were doing when they were putting this on the market.
SAM PIZZIGATI: Well, I think the ultimate proof that they knew what they were doing: In 2007, Purdue Pharma accepted culpability in a suit against it and paid a multimillion dollar fine, and then continued to do after that settlement the same sort of aggressive marketing that led to the overprescribing and the overuse of Oxycontin and other opioids. They knew what they were doing. That was their business plan. Their business plan was to increase the usage of these dangerously addictive drugs.
MARC STEINER: So there’s one more quick clip here, just about the addiction in Kentucky I want to show everybody. And then I want to finally really get to, again, back to what we do now, given the Cleveland, Ohio trial taking place and other things. But let’s take a quick look at this.
SPEAKER: Do you believe Purdue’s conduct in marketing and promoting Oxycontin in Kentucky caused any of the prescription drug addiction problems now plaguing the Commonwealth?
RICHARD SACKLER: I don’t believe so.
SPEAKER: Sitting here today, after all you’ve come to learn as witness, do you believe that Purdue’s conduct in Kentucky has led to an excessive or unnecessary amount of opioids being located throughout the Commonwealth of Kentucky?
RICHARD SACKLER: I don’t believe so.
SPEAKER: Do you believe that any of Purdue’s conduct has led to an increase in people being addicted in the Commonwealth of Kentucky?
RICHARD SACKLER: No.
MARC STEINER: No. No.
SAM PIZZIGATI: Let’s remind ourselves of the human cost of his behavior.
MARC STEINER: Yes, please.
SAM PIZZIGATI: 400,000 people have died from opioid overdoses since the late 1990s. 400,000 people. We’re losing 50,000 people a year to overdoses. That’s more than die in traffic accidents every year. That’s many more than die in gun violence every year. This is a huge tragedy, a huge human tragedy, and people got rich. The rich got incredibly richer off of this tragedy. The Sackler family now is worth some $13 billion according to the Bloomberg billionaire index. $13 billion. Under the settlement that was leaked out that hasn’t been finalized yet, the Sackler family will give up $3 billion. They’ll still end up incredibly rich and powerful after they pay off this $3 billion. That’s wrong. These people should be in jail. People died. People have died. Hundreds of thousands of people have died and nobody responsible is going to pay personally.
MARC STEINER: A couple of quick things here as we close. One has to do with … I mean, their public argument, of course, is that “we sold this to doctors; it’s the drug dealers on the streets that are doing the wrong thing. We’re doing the right thing by helping people with their pain.” I mean, that’s part of their argument and how they try to weasel out of this, by “we didn’t really break any laws. We didn’t cause these deaths; other people did.”
SAM PIZZIGATI: What the Sackler family did in the 1960s was link the tactics of Madison Avenue to the realities of the pharmaceutical industry. Before the Sackler family, before they started Purdue Pharma, nobody sent in huge sales forces into doctors’ offices. Nobody subsidized luxury trips for doctors. Nobody hired medical researchers to do blurbs in medical journals and things like that. The Sacklers invented modern pharmaceutical marketing. They created a market, first for Valium as an antidepressant. They made billions off of that and then they made their billions off of opioids starting in the 1990s. These people should pay.
MARC STEINER: They should pay. It makes me think of people like Jonas Salk, who invented the polio vaccine, who didn’t make millions of dollars off of polio vaccines. He just saved millions of lives.
SAM PIZZIGATI: Yes. Yes.
MARC STEINER: Very different consciousness about how it’s supposed to be.
SAM PIZZIGATI: Yes, absolutely. I think we need to see this in a bigger frame, this opioid crisis, that essentially the opioid crisis is both a consequence of the economic inequality we have in the United States today and a contributor to that inequality. Addiction epidemics only flourish in communities that have lost economic hope. And in the United States today we have thousands of communities that have lost economic hope, communities that had been squeezed and exploited by corporations and spit out. And these are the communities that have suffered the most from the opioid crisis.
And then on the other hand, people have gotten rich off of fomenting and sustaining this epidemic. It’s a great human tragedy and we need to move to make sure this never happens again.
MARC STEINER: I agree. And you have to also ensure that this money that’s being paid to localities actually goes to help human beings and people in communities, and not to build golf courses and whatever else politicians want to do, and maybe actually control these corporations from not doing what they do to us. And Sam Pizzigati, thank you so much for taking your time today. I deeply appreciate your being willing to be with us today. Thank you.
SAM PIZZIGATI: Thank you very much.
MARC STEINER: And I’m Marc Steiner here for The Real News Network. Thank you all so much for watching. Let us know what you think. Take care.