What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing today we're going over a decades-long multi-billion dollar scandal that has only heated up in recent months. We're talking about purdue pharma in the sackler family. The people widely blamed for fueling the opioid crisis in america. The opioid crisis, which is set around purdue pharma's drug oxycontin, has swept the nation and is estimated to have already killed hundreds of thousands of people just from overdoses.

In recent investigations and hearings by the department of justice and the house of representatives committee on oversight and reform, it was revealed that purdue pharma used aggressive marketing to cause their drug oxycontin to be overprescribed. They even made bribe-like payments to a prescription software company for the ability to artificially increase the frequency of their drug being recommended for doctors to prescribe their oxycontin business has both made them fabulously, wealthy to the tune of tens of billions of dollars, while at the same Time making them one of the most hated families in america, congressman jim cooper, even said that the sacklers might be the most evil family in the entire country. In this video we'll go over what exactly the sackler family did to build up their oxycontin empire and what they are doing in response to the accusations that they caused the opioid epidemic the modern day, sackler family has its american roots with three brothers arthur mortimer and Raymond sackler arthur was the oldest of the three he was born in 1913 and attended high school in brooklyn between the first and second world wars. All three brothers ended up attending medical school, arthur, attended, new york, university and mortimer and raymond both attended, middlesex university.

All three of the brothers had illustrious early careers, focusing in the medical field of psychiatry. For instance, arthur sackler was involved in numerous academic papers in neuroendocrinology, psychiatry and experimental medicine. According to the washington post, he was one of the first people to utilize ultrasound for diagnostic work. The three brothers also co-founded, the creedmoor institute for psychobiological studies and some of the academic work that the sackler brothers were involved in human subjects, were referenced in relation to the study of the effects of various drugs on people with mental illness.

However, that was before things like the nuremberg code regulated the use of human trials. The sackler family's main controversy has its beginnings in the early 1950s when they purchased the purdue frederick company. This company primarily engaged in producing and selling over-the-counter drugs. These drugs initially treated mild conditions and were things such as laxatives and earwax removers.

However, they also sold a form of morphine called ms content. Ms content is called an extended release formulation of morphine, meaning that the effects last much longer than regular morphine. It's still sold in the u.s as a schedule - 2 drug. That means, as in the second most extreme class of drugs.

Its potential for abuse is high. It's highly addictive and is only accepted for medical use with severe restrictions. However, perhaps the most dangerous opioid in america was oxycodone. Oxycodone was originally even used by the german military in world war ii for its powerful physiological effects.

Nowadays it is one of the most widely used recreational drugs in the u.s. It's estimated by the u.s department of health and human services that over 10 million people in the u.s abuse the drug each year. It is a driving factor in the ongoing opioid epidemic in america, which claims tens of thousands of lives. Every year.

In 2007, there were over 40 000 emergency room visits related to oxycodone, and the sackler family and purdue pharma have been a keystone piece of it, as well as a massive financial beneficiary to the tune of billions of dollars. Due to the harmful effects of oxycodone merck, which was a dominant producer of the drug in the 20th century, stopped making it in the late 1980s, the proliferation of highly publicized addiction issues caused by the drug threatened the company from a publicity, ethical and legal standpoint. However, purdue pharma saw the opportunity in the market for this controversial drug that merck left behind. They began selling oxycodone just a few years later in 1996, under the name oxycontin, they advertised their formulation of oxycodone as a slower release version of the drug, supposedly offering better relief from chronic pain and being less susceptible to abuse.

Purdue pharma promoted, oxycontin aggressively and it quickly became the dominant opioid at the center of america's opioid epidemic with drugs becoming a bigger, bigger problem in america, purdue pharma's involvement became too big for the government to ignore. In 2019, a lawsuit was brought in the southern district of new york. On behalf of hundreds of municipalities, the suit was against eight of the sackler family members closely involved with the company. This lawsuit opened up the family to a flood of investigations and legal action.

Painting the blame for the opioid epidemic on them soon after it was revealed just how far the sackler family and purdue pharma went in their quest to flood america with their drugs. In early 2020, the u.s department of justice revealed the results of an investigation into a scheme aimed at increasing opioid prescriptions. It involved a san francisco-based health tech, startup called practice fusion, which produces software that helps doctors, prescribe drugs to patients. According to the doj, this company admitted to receiving kickbacks for artificially influencing doctors who use their software to prescribe opioid painkillers.

In other words, they took bribes in exchange for reading their prescription software to cause more opioid prescriptions to be made. Although the doj did not name the party that paid the bribes, they called it, a quote: major opioid company, unquote reuters, reported that the company was in fact purdue pharma later that same year, the house of representatives committee on oversight and reform held a hearing on the Sacklers and purdue pharma in the hearing congressman james comer of kentucky said quote: we don't agree on a lot on this committee in a bipartisan way, but i think our opinion of purdue pharma and the actions of your family are sickening unquote. Observers of the hearing said that the sackler's responses to the accusations made by the committee showed that they did not have any genuine moral empathy in the matter and instead only made rehearsed responses. Other members of the committee accuse the sacklers of being addicted to money and even being an evil family.

For example, jim cooper of tennessee, which is a state that has hit hard by drugs in recent decades, went as far as saying that he's not sure. If he's aware of any family in america, that's more evil than the sacklers, an illegal move to try to protect the family's billions, purdue pharma filed to dissolve itself in early 2021, the move would create a new company whose supposed primary purpose is to combat the opioid Crisis, it would also contribute 4.2 billion from the sackler family over almost a decade to resolve legal claims against them in a press release the sackler family touted developments, as quote an important step towards providing help to those who suffer from addiction. Unquote, however, dozens of attorneys general from various states across the country oppose the move. The reason is that is similar in some ways to a regular bankruptcy.

Purdue pharma and the sacklers have to contribute billions of dollars towards cleaning up the opioid crisis which they largely created, but at the same time it protects them from any future lawsuits. The attorneys general, who posed a restructuring plan, so they would essentially allow the sacklers to escape the consequences of their actions. However, the legal fees and severity of the opioid crisis put several states in a position where it's better to take a bird in the hand, rather than wait for a potential two birds. Still in the bush, they agreed to settle with purdue pharma for a collective 4.5 billion dollars in an agreement that the sacklers would never produce opioids ever again in court.

The judge lamented the deal saying that the settlement should have been higher and that the sacklers had moved money to offshore bank accounts to shield their assets from lawsuits, despite the settlement being perhaps too lenient on the sacklers. The states tripled by the opioid crisis were no match for the sackler's, powerful lawyers and sophisticated financial maneuvers. So what does the sackler family do with all that opioid money? It's well known that high tastes such as art have long intrigued. Members of their family, for example, arthur sackler the lead brother in forming the sackler era.

Purdue pharma company was a major art collector, especially chinese art, by the time of his death. His personal collection numbered in the tens of thousands, in addition to collecting art the sackler family, gave generously to various museums, such as the guggenheim and the metropolitan museum of art. They also gave to prestigious academic institutions and medical schools such as harvard oxford and yale. The medical school at tel aviv university in israel is named after the zacklers.

Despite their philanthropy, the sacklers have been characterized as using their gifts to cover up the means by which they became rich in the first place in the past several years. High-Profile beneficiaries of their philanthropy, such as the louvre in paris and the metropolitan museum of art in new york city, have announced they are cutting their association with the sackler family. This includes removing their name from exhibits and refusing any future donations from the family. With the tide of public sentiment against them, even the sackers themselves have become divided over the oxycontin crisis.

The three brothers arthur mortimer and raymond each have their side of the family, blaming the others for the opioid crisis. Arthur died in the 1980s a decade before purdue pharma started selling oxycontin his estate was worth between 1 and 200 million dollars at the time of his death. Mortimer, on the other hand, lived until 2010 and raymond lived until 2017.. Both of them held the position of chief executive officer of purdue pharma at times, and their children and grandchildren were also massive beneficiaries of purdue pharma's prophets after arthur died, mortimer and raymond acquired arthur's one-third share of the company for a combined 22 million dollars.

At the time, arthur's surviving wife and children thus did not share in the profits of the company. In the oxycontin era, arthur's daughter, elizabeth sackler, has said that the fortune, her aunts and cousins amassed from purdue pharma was quote. Morally abhorrent unquote forbes magazine estimated that that fortune was worth about 13 billion dollars, despite the disparity in fortune and association with purdue pharma in the oxycontin era, all the sacklers have had their names forever tarnished by the association with the opioid crisis. Alright guys that wraps it up for today's video, what do you think about the sacklers? Do you think they can be blamed for america's opioid crisis? Let us know in the comments section below in the meantime, if you enjoyed this content, make sure to smash the like button and subscribe.

So you don't miss future videos as always. Thank you so much for watching and we'll see in the next one wall. Street millennial signing out.