The Hatch-Waxman Act that opened the door to robust generic competition caused considerable anxiety at Purdue. The FDA had not approved MST Continus for sale in the U.S. until 1987, seven years after it had gone on sale in the U.K. For the American market, Arthur thought MS Contin was a more commercial name than the Latin-based Continus. Purdue did not have the luxury of a pipeline of drugs ready for release every couple of years. The Sacklers would not mind Purdue Frederick being dubbed a one-drug company if its solo product was a smash hit.
Under FDA rules that the time for a drug patent ran from the date of discovery, Purdue had as little as five years before generics undercut MS Contin profits.1 Such competition was not much of a concern before Hatch-Waxman.2 The Sacklers had been in the industry long enough to know that any regulatory statute, no matter how well intentioned by those who crafted it, had loopholes. It did not take long to find one in Hatch-Waxman. That law required the FDA to freeze the approval process for any generic drug if the brand-name patent holder challenged it in court. The lawsuits quickly became a kitchen sink of allegations, everything from questioning the safety of the generic’s manufacturing facilities to accusations of corporate espionage to claims of patent infringement. The legal costs were usually a fraction of what a drug company might earn by keeping the patent intact on its blockbuster medication. Bristol-Myers Squibb later lost its litigation but not before it blocked for two years any generic competition to its hit Taxol cancer drug. Bristol had earned hundreds of millions from Taxol while it kept the copycat drugs tied up in the courts for an estimated $20 to $25 million in legal costs.3 In other cases, parties avoided litigation with what the industry dubbed “pay for delay.” Brand manufacturers paid generic companies to delay their drugs. Bayer paid $398 million to a competitor to postpone its generic rival to Bayer’s Cipro antibiotic. Bayer earned nearly twice that by keeping Cipro unchallenged.4
MS Contin was profitable but not such a success that Purdue could afford to tie up would-be generic competitors in litigation. Richard Sackler—with the blessing of his father, Raymond—spearheaded a project that he hoped would protect Purdue from generic headwinds. Richard wanted an improved painkiller, one that might have much broader commercial appeal than MS Contin.5
Dr. Robert Kaiko, Purdue’s vice president of clinical research, had been a key researcher on MS Contin. He agreed Purdue should concentrate on producing new “controlled-release opioids.”6 The company knew the field of narcotic painkillers well, said Kaiko, so there was no reason to take too far a detour for its next-generation product.
Both Sackler and Kaiko believed that MS Contin’s active ingredient, morphine, was problematic if they hoped to reach a larger market. Morphine had too notorious a reputation. Purdue’s own data showed that doctors dispensed MS Contin mostly to terminal cancer patients.7 “It was an inhibition to the use of a product in every application,” Richard Sackler later testified. “I believe the stigma… [was] that morphine was an end-of-life drug, if it was to be used at all.”8
It did not take long before Purdue’s science team settled on a different opioid, oxycodone, a chemical cousin of heroin. Two other drug companies were researching extended release narcotic painkillers but neither had focused on oxycodone.9 While there were some oxycodone-based painkillers on the market—Percodan (oxycodone and aspirin) and Percocet (oxycodone and acetaminophen)—they were immediate release pills. If Purdue could master an extended release oxycodone-only pill, it would be the first of its kind.
This was the period during which the Sacklers filed several patents that provided a chemical roadmap for such a drug. To prevent competitors from easily finding out what they were up to, they assigned some of the patents to Mundipharma. Most, however, went to a company called Euro-Celtique. The author tracked Euro-Celtique to Luxembourg, where it was incorporated. It was an affiliate of Purdue Biopharma LP, a now defunct New Jersey–based subsidiary of Purdue Pharma LP.10 Napp in the U.K. was working in tandem with American Purdue. Napp had 30 percent of its Cambridge staff dedicated to research. After its success with MST Continus, that focus helped Napp obtain approval for additional narcotic painkillers, from Sevredol, an immediate release morphine tablet, to Palladone, a synthetic opioid several times stronger than heroin (pulled from the U.S. market in 2005 because of “serious and potentially adverse reactions can occur… [when] taken together with alcohol.”).11
The good news for the Sacklers in the U.S. was that they knew any narcotic painkiller they developed would be well received by doctors. Oncologists liked MS Contin and had judged it a solid advance in palliative care. Purdue’s medical department had sponsored nine multidose studies in Canada and Europe. The results were published in Cancer shortly after it went on sale in the U.S. Ninety-three percent of patients with “moderate to severe cancer related pain… achieved satisfactory to excellent analgesia on a twelve-hour regimen.” The remaining 7 percent got “good results with eight-hour dosing.” The bottom line was that MS Contin “was judged to be significantly more effective, and with significantly fewer side effects than both the pre-study opioid analgesics.”12
There had been few options before MS Contin for treating the pain of terminally ill patients. Most short-acting opioid-based painkillers were mixed with aspirin or acetaminophen. Since the immune systems of cancer patients were compromised from chemotherapy or radiation, the mixed analgesics could result in life-threatening liver damage.
Besides lobbying his father and uncles for prioritizing an MS Contin successor, Richard Sackler also raised a more fundamental issue. The younger Sackler thought it was time to create a new company.13 Most of Purdue Frederick’s product line, he told them, was outdated and it did not have a reputation inside the industry for dramatic lab discoveries. Betadine and Senokot might be well known but they garnered little to no respect from rivals.
The elder Sacklers had a sentimental attachment to Purdue Frederick and liked it as it was. They were satisfied with the solid profits from a product line that did not depend on the fate of a single hit drug. The company they had bought in 1952 had never lost money. Sales had increased annually. Their international operations through Napp and the Mundipharma network were expanding rapidly.
Richard was not the only member of the next generation of Sacklers, however, who had grander plans.I The younger Sacklers felt burdened to live up to the expectations of their demanding, rags-to-riches parents. And it was tiring, the author learned, when at industry events someone looked at one of their business cards and said something to the effect of “Oh, the Betadine company.”14 They wanted to build a new Purdue beyond the imagination and vision of their fathers and none thought that was possible by relying on products such as laxatives, disinfectants, and MS Contin.
Arthur, Mortimer, and Raymond cautioned patience. Wait for the next painkiller from the labs, they suggested, before deciding. Maybe it was time instead to introduce Napp Pharmaceuticals to the United States? Since its 1966 founding, it had carved out a solid reputation in Britain and Europe for innovative laboratory research and quality products.
All the Sacklers agreed that the pharmaceutical industry in which Arthur, Mortimer, and Raymond had created their empire was undergoing rapid change. AIDS activists had shamed the FDA into putting a few experimental drugs on a faster approval track. Some pharma executives hoped quicker approvals might filter down to less important drugs.15 That seemed unlikely, however, since the FDA’s budget had been slashed even before it had the added responsibility for AIDS. That put the agency under great stress in the second half of the decade as it tried playing catch-up for its failure to respond aggressively earlier. The FDA’s smaller size and added duties would lead over several years to what its commissioner, Dr. Frank Young, called a “partnership” with the drug industry. It no longer had the staff or budget to be as adversarial, even if it wanted to do so.
Some of its failures played out publicly. A blood screening test to detect HIV antibodies was not available until 1985, when the Reagan downsizing had decimated its ranks of blood supply inspectors. Plans for the blood industry to police itself proved unrealistic. Blood banks, including the Red Cross, repeatedly labeled and sold as safe blood products that had tested positive for HIV or hepatitis.16 Pharmaceutical firms were not much better. Armour ignored the advice of one of its scientists and for two years sold infected blood that caused infections and deaths in the U.S., Canada, the Netherlands, and the U.K.17
Richard Sackler contended that if the FDA did not have the resources to regulate something as critical as the nation’s blood supply during an era of AIDS, it meant that the approval bottleneck for non-lifesaving drugs would only worsen. Even if Purdue researchers developed a good MS Contin successor, it might get bogged down in the FDA’s cumbersome bureaucracy.
Arthur was the only senior Sackler who did not totally dismiss the ideas of his nephews and nieces. He suggested the family should consider renaming Purdue Frederick as Sackler Pharma and spin it off. Then he proposed creating a new Purdue Pharma to assume the risks and rewards of future drug launches.18 Arthur thought his solution was simple and ideal. Raymond and Mortimer were not enthusiastic. It had been many years since Arthur was able to dictate what they should do and when it came to Purdue, which was their fiefdom, they seemed almost instinctively to reject whatever he suggested.
While the Sacklers debated Purdue’s future, Arthur had a couple of moments about which to brag to his brothers. Scientific American asked him in 1985 to join its board of directors, stocked with medical and pharmaceutical luminaries. Linus Pauling, the American biochemist who had won the Nobel in Medicine as well as the Nobel Peace Prize, dedicated his 1986 book, How to Live Longer and Feel Better, to him.19 Mortimer and Raymond knew their brother and Pauling had been friends since the early 1960s when Pauling’s political activism had gotten him branded a peace activist with communist sympathies (Pauling unsuccessfully sued the National Review and its editor, William Buckley, in 1965 for writing that he was a “fellow traveler” with the Soviets). Pauling and Sackler shared political passions in opposition to the Vietnam War and the growth of the American military.
The family discussions sparked by Richard Sackler’s ambitious idea for a different kind of drug company were cut short the day after Memorial Day, May 25, 1987. A panicked telephone call came into the family before dawn. Arthur had fallen unconscious at his Manhattan home and was rushed to Columbia-Presbyterian Medical Center. The grim word came that afternoon from the treating physicians: seventy-three-year-old Arthur had died of a heart attack.20
It happened so quickly that no one in the family had a chance to prepare for his death and say, as one friend later said, “a proper goodbye.” Mortimer, then seventy, and Raymond, sixty-seven, may have often bristled at Arthur’s dismissive, know-it-all attitude, but they had not known a world without him.II21
Arthur’s will was submitted for probate the following month. All his property and art was in two eponymously named trusts. Michael Sonnenreich, Arthur’s friend, lawyer, and occasional business partner, was the executor. The probate court also appointed him in the important fiduciary role of independent trustee, whose responsibility was to ensure that the trust was administered as Arthur wanted.22 The other trustees were Arthur’s first wife, Else; his then wife, Jillian; and his four children from two marriages (Carol Master, Elizabeth Sackler, Arthur Jr., and Denise Marika). Marietta was conspicuous by her absence. Arthur was insistent she be excluded from any role overseeing the estate and she got no bequests.
The estate was very conservatively valued for tax purposes at $140 million. Mortimer, the author learned, laughed when he heard that valuation. He considered it at least twice that and said, “They must have divided by two.”23 German-based Springer, Europe’s largest newspaper publisher, paid $75 million just for Arthur’s Medical Tribune.24 III 25
Arthur directed that all the income produced from the trust be paid annually to Jillian, who had only married Arthur six years earlier. That bequest infuriated his children, who split a single payment of $600,000. Sackler’s will kicked off two decades of often nasty litigation between family members. They spent millions in legal fees over battles that left enmity between some of them to this day. Sonnenreich and Arthur’s children brought Jillian to court in an unsuccessful suit to invalidate the trust.26 She later sued the trust when it denied her request to loan some of Arthur’s art collection for an exhibition she planned and also to use a sixteenth-century Chinese bed and several other collectible pieces of furniture on display at her home.27 She prevailed initially but the judgment was overturned on appeal.28 Jillian also failed later to stop the sale of some of Arthur’s collection, including his Renaissance ceramics (majolica), and some terra-cottas and bronzes.29 She later refused to pay $2 million of a $3.5 million bill from her original lawyers, Breed, Abbott and Morgan. They sued for their fee and she counterclaimed for malpractice.30 At another point, Else Sackler had to sue to get $2 million from the trust over a contested promissory note Arthur had created before he died.31 Even a dispute over $54,000 in a bill submitted by a previous guardian ad litem (appointed for any interest Arthur’s grandchildren might have had in the estate) ended up in court (the judge awarded half the amount).32 The squabbling did not stop even after Else’s death in 2000. Arthur’s children from their marriage, Carol and Elizabeth, were appointed as the trustees for their mother’s estate. They were soon part of a bitter lawsuit, a 2007 action in which they all had different takes on the executor’s commission.33
While most of the estate litigation pitted Arthur’s children against his third wife, Jillian, they also sometimes joined forces against Mortimer and Raymond. Sonnenreich told the author that the first problem arose from Bill Frohlich’s IMS. “It was Arthur’s creation,” Sonnenreich says. “Arthur had removed himself so there was no appearance of any conflict of interest between his advertising agency and IMS. He put Mortie and Ray into it. And they had all agreed that if Frohlich ever sold it, his share would be split four ways.”34 Instead, Mortimer and Raymond got $37 million each when Dun & Bradstreet acquired IMS in 1988, a year after Arthur’s death. There were heated meetings about whether Arthur’s family would receive anything from the IMS sale.
“Mortie and Ray knew about the Frohlich agreement, but they pretended they didn’t,” Sonnenreich recalled.35 Raymond relied in part on advice from the New York law firm of Chadbourne & Parke. A partner there, Stuart Baker, had been the chief outside counsel for Purdue Frederick since the late 1970s. Mortimer had also retained an American law firm in case the Frohlich dispute went to court. (Since he lived abroad, Mortimer relied on a British solicitor, Christopher Benbow, who represented the family’s U.K. pharma firms.)IV
Ultimately, it was not possible to challenge Mortimer and Raymond since both Frohlich and Arthur were dead. There was no documentation to support the “handshake agreement.”36 Arthur’s children were not the only ones furious at their uncles. Jillian complained that the duo had taken millions in outsized profits from Purdue Frederick, money that should have been split with Arthur. “There was supposed to be a three-way agreement with Purdue Frederick, and they have taken gigantic sums out of that,” Jillian complained to Sonnenreich.37 The final, bitterly contested buyout of Arthur’s one-third share in Purdue Frederick was $22,353,750 (when OxyContin became a blockbuster after its 1996 release, that would be less than a week of its sales). Following the family tradition of insisting on long payment schedules for their philanthropic gifts, Mortimer and Raymond demanded and got one: the last installment to Arthur’s estate was November 1997, more than a decade after he had died.38
All the family battles that followed Arthur’s unexpected death stayed out of the press. The Sacklers were not yet famous enough to attract lurid coverage from New York’s tabloids. That was good news for the family, says Sonnenreich. “No one likes airing dirty laundry in public.”
I. The “next generation of Sacklers,” in this instance, refers to Raymond’s sons Richard and Jonathan and three of Mortimer’s children, Mortimer A., Kathe, and Ilene. None of Arthur’s four children ever had anything to do with Purdue Pharma. “The Sacklers,” when used in reference to Purdue Pharma, covers all the Sackler family directors, including first-generation members Mortimer, Raymond, and his wife, Beverly. All declined through their attorneys or representatives to be interviewed for this book. Other Sacklers, including Arthur’s children and some of the grandchildren of Mortimer and Raymond, did not answer interview inquiries. Beverly Sackler, Raymond’s first wife and a Purdue director, died in October 2019, while my interview request was pending with her New York publicist. A different New York publicist representing Arthur’s third wife, Jillian, asked for more information about my project, but this did not lead to an interview.
II. By the end of 1987, Mortimer and Raymond told friends it was a pity Arthur had not lived to see Eli Lilly release the world’s first selective serotonin reuptake inhibitor (SSRI), Prozac. It kicked off a mental health revolution. Prozac—and the chemical copycats that followed—Zoloft, Celexa, Lexapro, among others—was as much a cultural watershed for the way people viewed clinical depression and its treatment as the contraceptive pill had been in 1960 for women to control reproductive rights. Prozac was the first SSRI to reach a billion dollars in annual sales. It and the SSRIs that followed were the fulfillment—in an updated and more sophisticated chemical composition—of the Holy Grail: a lifestyle mind drug that Arthur Sackler had searched for in the late 1950s. SSRIs replaced Valium, Xanax, and the benzodiazepines as the world’s best-selling psychopharmacologic drugs.
III. In 2006, the estate’s value was reduced by $21 million from an original estimate in the value of Sackler’s art collection. It made that adjustment based on a 1998 appraisal from Sotheby’s. A smaller appraisal translated into lower estate taxes.
IV. Both Baker and Benbow were directors of Sackler companies before Arthur’s death (Baker incorporated Mundipharma Inc. in New York in 1979 and Benbow had been a director of Napp in the U.K. since the mid-1970s). Benbow resigned nearly fifteen of his director’s positions on different Sackler-owned foreign corporations in 2016 and 2017. As of 2019, the author confirmed that Stuart Baker was inactive as a director on some twenty companies, but was an active director on more than a dozen, including Britain’s two Napp companies, five Mundipharma firms in the U.K., and others in India, Denmark, and Myanmar (files in collection of author). Neither attorney has ever been named in any complaint filed against a Sackler company nor ever accused of any wrongdoing by plaintiffs who subsequently sued Purdue over its aggressive marketing of OxyContin, its blockbuster narcotic painkiller.