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Attorney General William Tong

04/22/2019

ATTORNEY GENERAL TONG EXPANDS LAWSUIT AGAINST PURDUE, SACKLERS, ALLEGES FRAUDULENT TRANSFER OF FUNDS TO EVADE ACCOUNTABILITY TO CONNECTICUT VICTIMS OF OPIOID EPIDEMIC

Expanded, Amended Complaint Sheds New Light on "Deceptive Ground Game" Pushing Deadly Opioids in Connecticut

Connecticut Attorney General William Tong has filed an expanded, amended lawsuit against Purdue Pharma, members of the Sackler family, former members of Purdue's Board of Directors and corporate executives, and Sackler-controlled companies alleging fraudulent transfer of hundreds of millions of dollars from Purdue Pharma to the Sacklers to evade liability and accountability to Connecticut victims of the opioid epidemic.

The amended complaint alleges new details of the deadly ground game Purdue deployed in Connecticut to push its dangerously addictive opioids, and takes direct aim at Purdue's recent threats of bankruptcy. The lawsuit seeks to claw back funds transferred from Purdue to the Sacklers, as well as a court order to prevent any further transfer of funds.

"We will not allow Purdue Pharma to cry poverty after illegally transferring hundreds of millions of dollars to members of the Sackler family—unearned funds these individuals reaped as Connecticut families suffered. Our amended complaint takes direct aim at Purdue's efforts to shirk responsibility through bankruptcy. We are seeking a court order to claw back funds and block any further attempt to line the Sacklers' pockets with money that should be used to correct the crisis they have created. Our investigation has left no room for doubt—Purdue and the Sacklers ignored all human cost while pushing deadly opioids in blind pursuit of profit. They must be held accountable for the resources necessary for long-term recovery and treatment, to stop this devastating epidemic from spreading," said Attorney General William Tong.

The complaint amends an earlier lawsuit filed by Connecticut on December 20, 2018 that alleges that Purdue peddled a series of falsehoods to push patients toward its opioids, reaping massive profits from sales while opioid addiction skyrocketed in Connecticut and across the nation. The initial complaint alleged four counts of violations of the Connecticut Unfair Trade Practices Act, seeking damages, civil penalties, forfeiture of ill-gotten profits, restitution, and permanent injunctive relief. The amended complaint adds a fifth count—fraudulent transfer.

In addition to the fifth count, the amended complaint adds six new defendants, including five Sackler-held companies: Purdue Holdings L.P., PLP Associates Holdings L.P., BR Holdings Associates L.P., Rosebay Medical Company L.P., and Beacon Company. All are entities owned and controlled by trusts for the benefit of members of the Sackler family. Over the past decade, members of the Sackler family voted to distribute hundreds of millions of dollars in opioid profits from Purdue to these companies. At the same time these transfers were occurring, Purdue's own attorney and chief financial officer admitted in records obtained by Connecticut that claims against Purdue by the states would subject Purdue to the "billions" faced by "Big Tobacco in the 1990s."

The amended complaint provides new detail regarding activities by Purdue and the Sacklers to push opioid sales in doctors' offices, clinics, pharmacies, and hospitals in Connecticut, intentionally deceiving doctors and patients about the risk of addiction and death. Those include:

"It's the patient, not the opioids": Purdue and the Sacklers pushed a false narrative telling doctors that addiction was "not caused by drugs," but instead was the result of "susceptible individuals." Purdue falsely stated that "appropriate" patients would not get addicted.

Higher and Higher Doses: Higher doses mean higher profits for Purdue, despite the higher risk of addiction and death. The amended complaint alleges new details of sales tactics by Purdue to "individualize the dose" and push higher doses.

"Pseudoaddiction": To convince doctors to increase the dose for addicted patients, the complaint alleges that Purdue peddled the false notion that patients suffered from "pseudoaddiction" caused by inadequate dosage. To treat the addiction, doctors needed to increase dosage, Purdue asserted.

Savings Cards: The complaint alleges that Purdue used savings cards to provide discounts to patients not fully covered by insurance in order to keep patients on opioids long enough for addiction to take hold.

No Approval-No Fear: The complaint alleges that Purdue conducted a failed study into the use of an opioid for osteoarthritis. Despite this failed clinical trial, Purdue directed its sales representatives to use marketing materials that highlighted patients with osteoarthritis, and specifically measured how its marketing team targeted osteoarthritis patients.

Region Zero: Purdue closely monitored opioid sales generated by doctors suspected of diversion and abuse on a code list they termed "Region Zero." Staff told the Sacklers that Purdue could lose 10 percent of their sales if Region Zero doctors stopped prescribing. Purdue decided to keep this list a secret from authorities.

In addition to Purdue Pharma, and related Sackler companies used to fraudulently convey money, the lawsuit names the following individuals as defendants:

1. Richard Sackler, former member of Board of Directors of Purdue Pharma Inc.
2. Jonathan Sackler, former member of Board of Directors of Purdue Pharma Inc.
3. Mortimer D.A. Sackler, former member of Board of Directors of Purdue Pharma Inc.
4. Kathe Sackler, former member of Board of Directors of Purdue Pharma Inc.
5. Ilene Sackler Lefcourt, former member of Board of Directors of Purdue Pharma Inc.
6. Beverly Sackler, former member of Board of Directors of Purdue Pharma Inc.
7. David Sackler, former member of Board of Directors of Purdue Pharma Inc.
8. Theresa Sackler, former member of Board of Directors of Purdue Pharma Inc.
9. Cecil Pickett, former member of Board of Directors of Purdue Pharma Inc.
10. Paulo Costa, former member of Board of Directors of Purdue Pharma Inc.
11. Ralph Snyderman, former member of Board of Directors of Purdue Pharma Inc.
12. Frank Peter Boer, former member of Board of Directors of Purdue Pharma Inc.
13. Judy Lewent, former member of Board of Directors of Purdue Pharma Inc.
14. John Stewart, Chief Executive Officer of Purdue Pharma (2007-2013)
15. Mark Timney, Chief Executive Officer of Purdue Pharma (2014-2017)
16. Russell Gasdia, Vice-President of Sales and Marketing (2001-2014) *
17. Purdue Holdings L.P., Sackler-controlled company *
18. PLP Associates Holdings L.P., Sackler-controlled company *
19. BR Holdings Associates L.P., Sackler-controlled company *
20. Rosebay Medical Company, L.P., Sackler-controlled company *
21. Beacon Company, Sackler-controlled company *

* indicates new defendant

Special Counsel for Opioids Kimberly Massicotte, Assistant Attorneys General Jeremy Pearlman, Eleanor Mullen, Ann-Marie DeGraffenreidt, John Wright, Alma Nunley, and Paralegal Specialists Lynn Rioux and Cheryl Turner, and Administrative Assistant Melissa Gordon assisted the Attorney General with this matter.
Twitter: @AGWilliamTong
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