Crain's NY Business: NY State Gov. Andrew Cuomo Begins a $2 Billion Fight Against Opioid Producers and Providers

Bottles of Purdue Pharma L.P. OxyContin medication sit on a pharmacy shelf

Cuomo launches his own $2 billion legal action against opioids

WILL BREDDERMAN, Crain's New York Business, September 10, 2019

Gov. Andrew Cuomo wants to inflict some pain on the producers and providers of dangerously addictive opioids.

Alleging an "industry-wide conspiracy," the governor announced on Tuesday that his Department of Financial Services had issued subpoenas to dozens of individuals, insurers and drug providers. These range from Oxycontin creator Purdue Pharma and members of its controlling Sackler family, to pharmacy benefit managers such as CVS Caremark and Navitus Health Solutions, to insurance giants such as Emblem Health and Aetna. Even New York City's Health+Hospitals' insurance arm Metro Plus falls under the probe's scrutiny.

Cuomo said his intention is to recover $2 billion he asserts New Yorkers overpaid in premium costs as a consequence of fraudulent activity in relation to opioids. State law authorizes DFS to regulate fraud in the insurance industry and to issue fines of up to $5,000 for every infraction, on top of recovering damages.

"I've seen a number of schemes and frauds, but the opioid scheme is as diabolical, as brazen, as obnoxious and as offensive as anything I've seen," Cuomo said, referring to the misrepresentation of the addictive qualities of opioids.

Cuomo stressed that this action is distinct from the lawsuit the attorney general's office lodged against Purdue Pharma last year. It is also separate from the case Mayor Bill de Blasio's administration has brought against the Sackler family, which founded and owns Purdue, and against chain pharmacies that supplied Oxycontin, including CVS and Wal-Mart.

It comes as a number of states have successfully sought damages or settlements from Purdue and Johnson & Johnson.

Ironically, Crain's found Cuomo's campaign has received $51,000 from Connecticut-based Purdue Pharma heir Jonathan Sackler, who resigned from the firm's board earlier this year and who is among those subpoenaed. The donations date as far back as 2011 and as recent as 2017.

Another subpoena went out to Crystal Run Healthcare, which is the subject of a federal probe into the funneling of hundreds of thousands of dollars to Cuomo's political efforts.

Report: Purdue Pharma owners offer to give up company that makes OxyContin

By Paul Schott, Stamford Advocate

 Updated 1:00 pm EDT, Tuesday, September 10, 2019

STAMFORD — OxyContin maker Purdue Pharma’s owners have reportedly agreed to give up “the entire value” of the company to settle lawsuits alleging that the company fueled the opioid crisis with deceptive marketing of its top-selling pain drug.

The Sackler family members who own Purdue have also offered “$3 billion in cash as part of the global resolution,” Josephine Martin, Purdue’s head of corporate affairs and communications, said in an email that was first reported by NPR. The Sacklers have also offered to contribute another $1.5 billion from the sale of their international prescription-drug business Mundipharma, Martin told NPR.

Those purported terms would mark the first time that the company or the Sacklers have outlined their conditions for resolving some or all of the approximately 2,000 lawsuits filed against the company by local governments across the country and nearly every state. Purdue reportedly offered last month $10 billion to $12 billion to settle the complaints, but it neither confirmed nor denied that account.

A message left Tuesday for Purdue was not immediately returned.

The office of Connecticut Attorney General William Tong, who attended a meeting in Cleveland last month with Purdue representatives and other state attorneys general, declined to comment.

Last week, Tong said he would accept a settlement if Purdue not only made a multibillion-dollar payout, but were also shut down. He also wants the Sacklers barred from selling prescription opioids.

Tong has also signaled his intent to continue pursuing Connecticut’s claims against Purdue and the Sacklers, if the company files for bankruptcy.

“It will not change how aggressive we are going to be,” he said Sunday. “We cannot predict how it will go, if it will go that way (to bankruptcy) at all. All I can tell you is we are ready.”

Amid growing signs that the company would file for bankruptcy, Purdue issued Sunday a statement that reiterated its desire to settle the lawsuits. The company has denied those complaints’ allegations.

“We have been actively working with numerous state attorneys general and other plaintiffs on solutions that have the potential to save tens of thousands of lives and deliver billions of dollars to the communities affected by the opioid abuse crisis,” the statement said. “Those negotiations continue, and we remain dedicated to a resolution that genuinely advances the public interest.”

Last week, Purdue and the Sacklers had rejected two offers from the states over how settlement payments would be handled, according to an email sent out Saturday by the attorneys general of Tennessee and North Carolina. The Sacklers purportedly declined to offer counter-proposals.

pschott@stamfordadvocate.com