The company that became Purdue Pharma was founded in 1892 by medical doctors John Purdue Gray and George Frederick Bingham in New York City as the Purdue Frederick Company. Sixty years later, in 1952, the company was sold to two other medical doctors, brothers Raymond and Mortimer Sackler, who relocated the business to Yonkers, New York. The Sacklers' older brother, Arthur Sackler, held a one-third option in the company, which was sold to his brothers after his death. Under the Sacklers, the company opened additional offices in New Jersey and Connecticut. The headquarters are located in Stamford, Connecticut.
Purdue Pharma manufactures pain medicines such as hydromorphone, oxycodone, fentanyl, codeine, and hydrocodone. It makes drugs such as MS Contin, OxyContin, and Ryzolt. In 1972, Contin (a controlled drug-release system) was developed. In 1984, its extended-release formulation of morphine, MS Contin was released. After 1995 Food and Drug Administration approval under the auspices of Curtis Wright, its extended-release formulation of oxycodone, OxyContin was released in 1996.
The present-day company, Purdue Pharma L.P., was incorporated in 1991 and focused on pain management medication, calling itself a "pioneer in developing medications for reducing pain, a principal cause of human suffering". In September 2015, the company's website said it had some 1,700 people on its payroll. That same month, the company announced it would acquire VM Pharma in the process gaining access to worldwide development and commercial rights to an allosteric selective tropomyosin receptor kinase inhibitor program, i.e., the Phase II candidate VM-902A. The deal could have generated more than US$213 million for VM Pharma.
OxyContin, introduced in 1995, was Purdue Pharma's breakthrough palliative for chronic pain. Under a marketing strategy that Arthur Sackler had pioneered decades earlier, the company aggressively pressed doctors to prescribe the drug, wooing them with free trips to pain-management seminars and paid speaking engagements. Sales soared. The drug was marketed as "smooth and sustained pain control all day and all night" when taken on a 12-hour schedule and as having lower abuse potential than immediate-release oxycodone because of its time-release properties, even though there was no scientific evidence backing that conclusion and the addictive nature of opiates had been known for thousands of years. In these early years, Purdue Pharma was aware of OxyContin abuse, including "reports that the pills were being crushed and snorted; stolen from pharmacies; and that some doctors were being charged with selling prescriptions," according to The New York Times, based on a confidential Justice Department report that was revealed in May 2018. Over a hundred internal company memos between 1997 and 1999 included the words "street value," "crush," or "snort."
Craig Landau was appointed CEO on June 22, 2017. He joined Purdue Pharma L.P. in 1999 and was chief medical officer and as vice president of R&D innovation, clinical and medical affairs. In 2013, he was appointed president and CEO of Purdue Pharma (Canada).
In 2001, Connecticut Attorney General Richard Blumenthal issued a statement urging Purdue to take action regarding abuse of Oxycontin. He observed that while Purdue seemed sincere, there was little action being taken beyond "cosmetic and symbolic steps." After Purdue announced plans to reformulate the drug, Blumenthal noted that this would take time and that "Purdue Pharma has a moral, if not legal obligation to take effective steps and address addiction and abuse even as it works to reformulate the drug."
In 2003, the Drug Enforcement Administration found that Purdue's "aggressive methods" had "very much exacerbated OxyContin's widespread abuse."
In 2004, the West Virginia Attorney General sued Purdue for reimbursement of "excessive prescription costs" paid by the state. Saying that patients were taking more of the drug than they had been prescribed because the effects of the drug wore off hours before the 12-hour schedule, the state charged Purdue with deceptive marketing. In his ruling the trial judge wrote: "Plaintiff's evidence shows Purdue could have tested the safety and efficacy of OxyContin at eight hours, and could have amended their label, but did not." The case never went to trial; Purdue agreed to settle by paying the state US$10 million(equivalent to approximately $14M in 2021) for programs to discourage drug abuse, with all the evidence remaining under seal and confidential.
Purdue Pharma L.P., formerly the Purdue Frederick Company, was an American privately held pharmaceutical company founded by John Purdue Gray. It was owned principally by members of the Sackler family as descendants of Mortimer and Raymond Sackler. In 2007, it paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling of its product OxyContin, and three executives were found guilty of criminal charges. Purdue Pharma will rebrand as KNOA Pharma. Although the company shifted its focus to abuse-deterrent formulations, Purdue continued to market and sell opioids as late as 2019 and continued to be involved in lawsuits around the opioid epidemic in the United States. Purdue filed for Chapter 11 bankruptcy protection on September 15, 2019, in New York City.
Rhodes Pharmaceuticals is a sister company that was established in Rhode Island in 2007. The company is one of the largest producers of off-patent generic opioids in the US.
In May 2007, the company pleaded guilty to misleading the public about OxyContin's risk of addiction and agreed to pay $600 million (equivalent to approximately $784M in 2021) in one of the largest pharmaceutical settlements in U.S. history. The company's president (Michael Friedman), top lawyer (Howard R. Udell), and former chief medical officer (Paul D. Goldenheim) pleaded guilty as individuals to misbranding charges, a criminal violation and agreed to pay a total of US$34.5 million in fines. Friedman, Udell, and Goldenheim agreed to pay US$19 million, US$8 million and US$7.5 million, respectively. In addition, three top executives were charged with a felony and sentenced to 400 hours of community service in drug treatment programs.
On October 4, 2007, Kentucky officials sued Purdue because of widespread OxyContin abuse in Appalachia. A lawsuit filed by Kentucky then-Attorney General Greg Stumbo and Pike County officials demanded millions in compensation. Eight years later, on December 23, 2015 Kentucky settled with Purdue for $24 million.
Purdue started the OxyContin "Savings Card" program in 2008, with patients receiving discounts on their first five prescriptions. Internal company data showed these discounts led to 60 percent more patients staying on OxyContin for longer than 90 days. The court filing for Massachusetts stated, "Purdue determined that opioid savings cards worked like the teaser rate on a long-term and very high-stakes mortgage."
At the start of 2000, reports of OxyContin abuse surfaced. The results obtained from a proactive abuse surveillance program called Researched Abused, Diversion, and Addiction-Related Surveillance (RADARS) sponsored by Purdue Pharma L.P. pronounced Oxycontin and hydrocodone the most commonly abused pain medications. In 2012, The New England Journal of Medicine published a study that found that "76 percent of those seeking help for heroin addiction began by abusing pharmaceutical narcotics, primarily OxyContin" and drew a direct line between Purdue's marketing of OxyContin and the subsequent heroin epidemic in the U.S.
In January 2017, the city of Everett, Washington sued Purdue based on increased costs for the city from the use of OxyContin as well as Purdue not intervening when they noted odd patterns of sale of their product, per agreement in the 2007 suit noted above. The allegations say Purdue did not follow legal agreements to track suspicious excess ordering or potential black market usage. The suit says false clinics created by unscrupulous doctors used homeless individuals as 'patients' to purchase OxyContin, then sold it to the citizens of Everett.
In 2018, Purdue Pharma patented a new form of buprenorphine which controls cravings and is used to treat addiction to opioids such as OxyContin.
In May 2018, six states—Florida, Nevada, North Carolina, North Dakota, Tennessee and Texas—filed lawsuits charging deceptive marketing practices, adding to 16 previously filed lawsuits by other U.S. states and Puerto Rico. By January 2019, 36 states were suing Purdue Pharma.
By 2018, eight members of the Sackler family were listed to be active or former members of the Board of Directors. By early 2019, the Sacklers had left the Purdue Pharma board, leaving none on the panel. Steve Miller became chairman in July 2018 with a board of five members left.
In 2019, Massachusetts attorney general Maura Healey filed a lawsuit against Purdue Pharma which also claimed eight members of the Sackler family were "personally responsible" for deceptive sales practices and in fact had "micromanaged" a "deceptive sales campaign." In response, the company said there was a “rush to vilify.”
In March 2019, Purdue Pharma reached a $270m settlement in a lawsuit filed by Oklahoma, which claimed its opioids contributed to the deaths of thousands of people.
In August 2019, Purdue Pharma and the Sackler family were in negotiations to settle the claims for a payment of $10-$12 billion. The settlement would include a Chapter 11 filing by Purdue Pharma, which would be restructured as public beneficiary trust and the Sackler Family would give up any ownership in the company. Addiction treatment drugs currently developed by the company would be given to the public cost-free. All profits of Purdue would henceforth go to the plaintiffs in the case. On top of that, the Sackler family would contribute $3 billion in cash. The family would also sell Mundipharma and contribute another $1.5 billion from the sales proceeds to the settlement. However, the Sackler family would remain a billionaire family and would not be criminally charged for contributing to the opioid crisis. On September 2019, the office of the New York Attorney General accused the Sackler family of hiding money by wiring at least $1 billion from company accounts to personal accounts overseas.
Many states refused the terms of the proposed August 2019 settlement and vowed to pursue further litigation to recover additional money, much of it alleged to be hidden offshore. The states contend the Sacklers knew litigants would be pursuing Purdue's funds and committed fraudulent conveyance. Whether or not a state had chosen to settle mostly fell along party lines, with Republican-led states choosing to settle. Most of the wealth of the Sackler Family is not held in Purdue. States are seeking to hold individual family members personally liable for the costs of the opioid epidemic, regardless of Purdue's bankruptcy.
In mid-September 2019, Purdue filed for bankruptcy in White Plains, New York, a few days after reaching a tentative settlement with state and local governments that were suing the company over the cost of the opioid epidemic.
A December 2019 audit from AlixPartners, hired by Purdue for guidance through Chapter 11 restructuring, said the Sacklers withdrew $10.7 billion from Purdue after the company began to receive legal scrutiny. In 2021, the Sacklers sought a controversial non-consensual third-party release in the authority of judge Robert D. Drain as to protect them and their assets from lawsuits linked to the opioid crisis. In reaction to this, US Representatives Carolyn Maloney and Mark DeSaulnier introduced a SACKLER Act as to prevent people who have not filed for bankruptcy from being released from lawsuits brought by states, municipalities or the U.S. government.
In October 2020, Purdue agreed to an $8 billion settlement that includes a $2 billion criminal forfeiture, a $3.54 billion criminal fine, and $2.8 billion in damages for its civil liability. It will plead guilty to three criminal charges, and it will become a public benefit company under a trust that is required to consider American public health. The Sacklers will not be permitted to be involved in the new company.
On October 21, 2020, it was reported that Purdue had reached a settlement potentially worth US$8.3 billion, admitting that it "knowingly and intentionally conspired and agreed with others to aid and abet" doctors dispensing medication "without a legitimate medical purpose." Members of the Sackler family will additionally pay US$225 million and the company will close. Some state attorneys general protested the plan. In March 2021, the United States House of Representatives introduced a bill that would stop the bankruptcy judge in the case from granting members of the Sackler family legal immunity during the bankruptcy proceedings.
In September 2021, the company won approval of a $4.5 billion (US) plan that will legally dissolve the pharmaceutical manufacturer and restructure it into a public benefit corporation focused on addressing the opioid crisis and repaying individuals and families who were damaged by its products. This restructuring will be financed by a settlement with the Sackler family, insurance payments and ongoing business operations. The settlement expunges all creditor claims against the Sacklers (who are not in bankruptcy) through a legal device, third-party releases, which eliminates the family’s exposure to civil litigation over opioid addiction. This settlement would be overturned in December 2021 by Judge Colleen McMahon of the U.S. District Court for the Southern District of New York, as bankruptcy code did not permit a judge to release the Sacklers from civil liability. Congress continues to discuss statutory restrictions on the releases.
In March 2022, a U.S. bankruptcy judge approved a settlement involving eight states plus the District of Columbia. Part of this settlement will involve the Sacklers leaving the company. The family will also pay up to $6 billion. In return, they will be shielded from personal civil liability. However, family members will not be shielded from potential criminal liability.
In early March 2022, members of the Sackler family that own Purdue Pharma struck a new settlement with a group of eight states and the District of Columbia to resolve the litigation. Under the terms of the new settlement agreement, which remains subject to review and approval from an appeals court and bankruptcy court confirmation, the Sacklers will pay between $5.5 and $6 billion to a trust that will be used to pay the claims of opioid creditors, including states, victims of addiction, hospitals, and municipalities.