Retired Oregon justice department lawyer says state should reject Purdue opioid settlement

David Hart isn’t necessarily one of the people you’d expect to be critical of the $7.4 billion multi-state opioid settlement reached with drug company Purdue. For 25 years, he was the assistant attorney general at the Oregon Department of Justice until his retirement last month, and he headed the department’s opioid litigation and recovery/pharmaceutical fraud unit. One way or another, he’s represented the state in opioid litigation and negotiations since 2004. But since he’s now retired, he feels an obligation to speak out about a settlement that he says is far too lenient and favorable to the Sackler family and their company, Purdue. Hart describes their behavior in igniting and fueling the opioid crisis “the worst of the worst.” He spoke with our news partner The Lund Report about his concerns and wrote an op-ed in the Oregonian/Oregonlive. He joins us to detail his concerns and how he’s making his case to the attorneys general in Oregon and the other states involved.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. At the beginning of this year, more than a dozen states announced that they had secured a proposed $7.4 billion opioid settlement with the Sackler family and their drug company Purdue.

David Hart is not necessarily one of the people you would expect to be critical of this deal. He worked as a prosecutor at the Oregon Department of Justice for 25 years, including heading the department’s opioid litigation and pharmaceutical fraud unit, meaning he spent more than two decades suing Purdue and eventually the Sackler family itself. But he retired last month and now he is speaking out against the proposed settlement, saying it is far too favorable to the family who, more than any other individuals, are responsible for fueling our nation’s ongoing opioid crisis.

He spoke with our news partner, The Lund Report, about his concerns. He wrote an op-ed in The Oregonian. And he joins us now. It’s good to have you on the show.

David Hart: Thank you for having me.

Miller: Do you remember the first time you heard about Purdue Pharma?

Hart: It was back in 2004. Frankly, at the time, I did not appreciate the scope of the problem. I’m not sure it’s polite to say now, but then it was considered “hillbilly heroin.” It wasn’t an issue here in Oregon. I had been working on pharmaceutical fraud, focusing on unlawful off-label promotion. When I was asked to join the executive committee of that first multi-state Purdue investigation, I saw it in that context. It was one more drug case.

Miller: Two years ago, we had Patrick Radden Keefe on the show. His book, the “Empire of Pain,” focused on the Sackler family and showed how they turned this one-time small company, that made laxatives and earwax remover, into the engine of our country’s opioid epidemic.

Even though we’ve talked about this before, I actually wanted to start early on just reminding listeners about some of these details, because people, humans have been using opiates for thousands of years. Synthetic opioids have been around for 100 or so years. What was different about Purdue’s product, OxyContin?

Hart: OxyContin was new, in the sense that it was an extended release. But what was unique about Oxy was the way it was promoted and sold. As you said, opioids have been around for hundreds of years. Doctors have been prescribing it judiciously, carefully. It was always understood that there are significant adverse associated events, everything from death from overdose, to increased risk of falling, respiratory depression and of course addiction.

What was different is when the Sacklers and Purdue started promoting OxyContin as something safer, something that was not just for acute pain, for severe pain, but for chronic pain like back pain – which frankly, not only does not work, but it makes things worse.

Miller: What was the lie at the heart of their marketing strategy?

Hart: That OxyContin is safer than other opioids, (A). (B), that opioids are safer than generally considered; that only people predisposed to addiction would become addicted; that only a small sliver of people who are given opioids would become addicted; that high doses, which are inherently dangerous and increase the risk of death, could be used safely.

Miller: How can we call all those things lies though? I mean, what has come out in terms of what the company knew and when they knew it in terms of their products?

Hart: If you look at internal company emails and documents, as described in many of the complaints, they were aware of the dangers associated with their product. They were also aware of social problems that were increasing as a result of their product. You can also look at the types of studies that they reported, that on their face they promoted, that on their face were not substantiation for the claims.

A very well known one was a letter written to the New England Journal of Medicine. It described an anecdote that 34 patients used opioids successfully. It was then extrapolated, blown up and promoted to be a study – which it was not. If you call an anecdotal report a study, that’s a lie. Also, it has been known for some time there were many publications indicating that using opioids did not improve function. It didn’t mean you could suddenly enjoy time with your grandchildren.

There was an ad for OxyContin where you see Grandpa having a great time fishing with the kids. That was a lie. So how do we know it was a lie? Because objectively, on its face, it was obvious to any impartial third party, and also our review of the internal documents. Many of those documents are still under seal. They shouldn’t be. The Oregon Department of Justice had a public records request. We were going to release many of these documents and Purdue successfully obtained a restraining order in 2016.

Miller: Just so I understand … so these are documents that you got access to as part of legal proceedings, so that you could review them. And the hope and the plan was that I could too, that the public could see them too. But the company successfully prevented that from happening?

Hart: Correct. Now, one aspect of this deal, which is very possible – which Attorney General Rosenblum and myself pushed for very strongly in the earlier settlements and in this one – is the creation of a public document repository. Johns Hopkins and the University of San Francisco are getting documents from the other opioid settlements and would get some from this settlement that will be made publicly available. So we want journalists, researchers and others to be able to review them so this doesn’t ever happen again. This happened in the tobacco settlement, for example. There’s a similar public document repository.

Miller: And it reminds me a little bit of South Africa’s Truth and Reconciliation Commissions. Obviously, that was about apartheid, but that there is value for society after something terrible happens, for at least there to be as much awareness and openness as possible.

Hart: That’s a very good analogy. And frankly, we pushed hard to get the Sacklers to make such a move. This was in the first round, the settlement that was ultimately thrown out by the Supreme Court. But we pushed very hard. So Oregon was one of nine states that rejected the earlier settlement and pushed hard for, not just more money, but additional terms like dropping the Sackler name from museums and medical schools, and that public acknowledgment. We never achieved the last.

Miller: You’ve skipped ahead a little bit, but you have such a long history here that I wanna hear a little bit about the first settlement that you got Oregon and other states to get Purdue to agree to. So what did they agree to in 2007?

Hart: Well, 2007 was frankly my biggest professional failure, which is one of the reasons why I’m pushing hard to reject this settlement. Oregon was on the executive committee. I was on the executive committee of what was a 26-state effort that culminated in this agreement in 2007. It was a court order, a judgment. We filed a complaint and there was a judgment filed. And there were injunctive terms that were intended to stop the misconduct ...

Miller: Injunctive, meaning the court saying stop doing this?

Hart: Correct. So it said you will not misrepresent that opioids are not addictive. You will not promote [the opioid] for back pain. You will not give money to third party front organizations. There were a litany of injunctive terms.

Miller: Did you celebrate when you achieved that?

Hart: Yes, we did our press release. Everyone felt proud of themselves and moved on to the next case.

Miller: So why was this your biggest professional failure?

Hart: Because after 2007, Purdue doubled down on the misconduct. The misconduct did not stop. It worsened. And more people died. And my regret is that if that first agreement had been more effective, many of those people would not have died.

Miller: But is that because the company went against the terms of the agreement or there was something in the terms of the agreement that let them legally get away with what they ended up doing?

Hart: Mainly it was because Purdue and the Sacklers ignored the agreement and decided to cash in. The lesson that they took is that there was an end in sight to this piggy bank and they better cash out while the going was good. That’s what we alleged in our first Sackler complaint.

Now there were deficiencies in the agreement, no doubt. We should have had an independent monitor embedded in the company. The norm is for companies to comply with court orders. Maybe they find some new way to promote their product. Maybe they don’t comply 100%, but they don’t ignore it.

Miller: You did push for language in that 2007 settlement that gave you access to internal documents at Purdue. What did you and your colleagues find when you looked into the company’s marketing in Oregon to Oregon doctors who had histories of overprescribing?

Hart: One of the terms of that first agreement was that they weren’t supposed to be targeting bad docs, so …

Miller: Pill pusher docs?

Hart: Yes, that’s an extreme form of a bad doc, but there are also doctors who are just overly aggressive and prescribe inappropriately. But when I became aware that it seemed that Purdue may have been violating that earlier settlement, we started obtaining documents pursuant to the first judgment, the ‘07 judgment.

We spent a lot of time looking at them. I had a small team reviewing the materials, and cross referencing with information we obtained from the Oregon Board of Pharmacy and other sources. And we were able to establish that they were targeting bad docs with extremely aggressive promotion. To put this in context, they did more than 150,000 visits to doctors in Oregon.

Miller: Sales representatives from Purdue, in Oregon alone, made 150,000 visits?

Hart: More than 150,000 visits.

Miller: Lunches or … ?

Hart: That included lunches, but some of them were just, you know, popping in the office.

Miller: “Hey, here I am. Don’t forget to prescribe OxyContin?”

Hart: Well, yes, more sophisticated than that, but absolutely. But worse, targeting the doctors that they knew or should have known were misusing, misprescribing OxyContin. So that’s an enormous program … and mailing thousands of promotional materials into Oregon, giving money to front organizations that were pushing their view in Oregon. So what we learned was that the ‘07 judgement was ineffective.

Miller: So what led Oregon to file a new suit against Purdue and eventually the Sacklers seven years ago?

Hart: At the culmination of our investigation, it became apparent to me and it became apparent to Attorney General Rosenblum that they were violating our law, violating the judgment, and the misconduct had continued. At that point, the first step is to issue what is called a demand, or a demand letter, which is to give them notice, which is required under our Unlawful Trade Practices Act. They have an opportunity to settle the matter without litigation. We were not able to obtain anything reasonable. At the same time, other states and other parties were starting to litigate against Purdue.

In all candor, we realized that we needed allies, that Purdue was gonna play hardball. We joined the multi-state group, the multi-state executive committee, and we were at the front edge of filing complaints, initially just against Purdue, but then against the Sacklers.

Miller: When you say that in all honesty, you needed allies, can you give us a sense for the scale of your operation in Oregon, compared to what the Sackler family/Purdue Pharma could afford in terms of their legal representation?

Hart: They hired an army of the top lawyers in the United States. So here I am, some physical therapist who went to night law school. And I’m facing an army of Harvard Law grads. I’m facing former U.S. attorneys. Anybody who prosecuted some of the top cases in the country [like] Patrick Fitzgerald.

Miller: A name that political watchers will remember from the 2000s.

Hart: He prosecuted Scooter Libby and the governor of Illinois. I mean, so many former U.S. attorneys then turned over to the dark side, if you ask me. But that was one case. I would write an eight-page letter and I would get a 105-page letter in return, which clearly demonstrated, as intended, that when we litigate they were gonna overwhelm us. So I often felt like David against Goliath.

Miller: Why did you include the Sacklers eventually in these legal proceedings, in addition to the company that they owned?

Hart: As we allege in our complaint, after 2007, the Sacklers looted between $11 [billion] and $12 billion dollars from the company. The intent was to make Purdue judgment proof. What they did was they made it impossible to recover anything to right the wrongs that were done.

Miller: So they took $11 [billion] or $12 billion out of their company and then soon after that the company declared bankruptcy?

Hart: Correct, yes. Now, that happened over a period of time.

Miller: How is that legal? Maybe that’s a naive question.

Hart: Well, we allege that it was a fraudulent conveyance. So that was our first lawsuit against the Sacklers.

Miller: Has that been adjudicated, that particular question?

Hart: No. First of all, everything is under a stay in bankruptcy. So the first thing that happens in bankruptcy is there is a stay. What’s unusual in this bankruptcy is that the stay extended beyond Purdue, which was going to bankrupt, but also to the owners. Now, I don’t wanna get too technical, but what happens in a bankruptcy is that type of cause of action goes to Purdue. So once Purdue went bankrupt, Oregon could no longer pursue the Sacklers for the fraudulent conveyance. That’s why we then sued them directly.

Miller: Let’s turn to the provisions of the new settlement that you are urging the Attorney General of Oregon to not sign on to: $7.4 billion. It calls for the family to pay most of that, $6.5 billion to states, to local governments, to others, in addition to $900 million from Purdue Pharma. What is wrong with that deal?

Hart: First of all, it’s “up to.” So put that in context. There’s an $800 million litigation fund out of that $6.5 billion that the Sacklers get to use to fight anybody who doesn’t take the deal.

Miller: Is it normal for that, almost a billion dollars, to be included in? If we say, “you’re gonna give us $6.5 billion, but actually you can use almost a billion of that to fight your own cases …”

Hart: It’s extraordinary and unique. I’ve never heard of anything like that happening before and it’s a terrible precedent.

Miller: What would that set up in terms of the dynamic? So there are 15 states total that had this litigation. Let’s say 12 of them sign it, and Oregon and two others don’t. What’s the dynamic between Oregon and those two states, and the other 12?

Hart: Well, they become adversaries.

Miller: Because every dollar that you would be asking for is a dollar that those states wouldn’t be getting to fight opioid addiction?

Hart: Correct. So that’s one of the terrible things, is it aligns the states against each other. It aligns the plaintiffs against other plaintiffs who want to hold the Sacklers accountable. So that is one big issue. But also, going back to the $6.8 [billion], or call it $5.8 [billion] – that’s over time. So it’s not as big a number as it sounds because it’s over 15, 16 years, although Oregon would have been paid in nine years.

Miller: So your argument is that it would be more fair to have this be much faster. Give us the money now. You’ve been doing this for decades. Give us the money now?

Hart: Well, the money is more valuable now, not just because of the time value of money, but it’s needed now. The good news is that we’re finally bending the curve on overdose deaths. But the money that’s gonna be used to combat the opioid epidemic is needed now, not in 15 years.

Miller: Money is obviously the part of the settlement that gets the most attention. But I’m curious about another provision that you mentioned briefly. As I understand it, this is something that you pushed for, to have to give museums or hospitals, universities the ability to take the Sackler name off of the many buildings that they put their names on. Why was that important to you?

Hart: I grew up in New York City and I remember going to the Sackler Wing of the Met Museum, which is the Temple of Dendur, this fantastic building. And prominent is [the] Sackler name. And it just seemed perverse and wrong that people who we allege were responsible for deaths get to take credit. It just is wrong. And that was very important to Attorney General Rosenblum as well.

Miller: I can tell you a couple of years ago, two years ago, I spent a lot of time in a hospital in New York, where a family member was. And that’s not the Met, this is a hospital. And there was a Sackler wing there. Every time I passed that sign, I would think the money that they paid for that chiseling came from a lot of people who ended up dying.

Hart: True that. Now, there were three Sackler brothers and one of the brothers, when he died in 1987, sold out to the other family. The point being, there’s a third branch of the family who are not responsible for this and they may still have their name up. So I’m not sure which hospital you’re talking about, but it’s possible it was another branch of the family.

Miller: So what happens if Dan Rayfield takes your serious urging … And I should say, so far, he has said he, too, is squeamish about the same exact provisions that you’ve been talking about. And he pointedly did not sign on to the press release in January when this was announced. We still don’t know how he’s ultimately going to decide this, but let’s play this through. Let’s say he does decide to not sign on to this. There’s no guarantee, right, that Oregon would get a better deal? What are the ways this could go?

Hart: Well, you’re right, there is no guarantee and litigation is always risky. The Supreme Court ruled that you cannot have a non-consensual third party release in bankruptcy. In other words, we can still pursue our direct act claims against the Sacklers. So we filed a complaint. The complaint has been stayed. That continues.

Now also, again without wanting to get too into the weeds and bankruptcy, we would still be able to obtain our share of the Purdue bankruptcy. And some of that $5.8 [billion] or $6.5 billion that the Sacklers are paying goes into the bankruptcy estate. So we would still get from that, maybe 25-30% of the total. Now, the question is, if we succeeded in our litigation against the Sacklers, and there is risk, we might obtain more. That said, they have their money stashed all over the world, in Isle of Jersey trusts, spendthrift trusts, that are hard to reach. So there is risk.

But I would also mention two things. First, Oregon has already gotten $750 million or so in our other opioid-related litigation. That money is coming in. And two, the Sacklers are particularly responsible. Sometimes you have to focus on justice and sometimes you have to focus on deterrent. And if the Sacklers are able to get away with it, so to speak, violate our ‘07 judgment, loot $11 [billion] to $12 billion from the company and keep a substantial portion of their fortune, that’s a terrible precedent. So I think that has to be the focus, more than any short-term gains.

Miller: Just briefly, for years, you would go to your downtown Portland office and try to fight the Sacklers and Purdue. And I imagine during that time, especially more recently, you were passing by people sometimes smoking fentanyl on pieces of foil or perhaps passed out after they had done so. What would go through your mind?

Hart: What a horror, what a nightmare. Now, Oregon, in our proof of claims submitted in the bankruptcy – which is a technical term – said we had $13 billion in damages. And those damages are the social damages. The people who are on the street now, the people who are unhoused, the people whose children are being raised by grandparents. So the devastation of the opioid epidemic has affected us all. It’s not just the individuals.

Miller: David Hart, thanks very much.

Hart: Thank you.

Miller: David Hart retired recently from the Oregon Department of Justice’s litigation group. He spent about 20 years suing Purdue Pharma and eventually the Sackler family.

“Think Out Loud®” broadcasts live at noon every day and rebroadcasts at 8 p.m.

If you’d like to comment on any of the topics in this show or suggest a topic of your own, please get in touch with us on Facebook, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983.