(Bloomberg) -- The Sackler family -- once known as global philanthropists backed by a fortune made from opioids and other drugs -- may lose most of their wealth if they agree to an $11.5 billion settlement to resolve lawsuits against them and their Purdue Pharma LP. Even under this scenario they’ll remain far from the poorhouse.
When last valued by the Bloomberg Billionaires Index in March, the Sacklers were worth $13 billion.That included previous payouts from Purdue -- court filings show the family made more than $4 billion from OxyContin sales from 2008 through 2015 -- as well as their ownership of Mundipharma, a global network of independent associated companies they founded in 1952.
Their fortune will drop below $1.5 billion based on the terms of the proposal, which envisions the family paying at least $3 billion in cash. Purdue would file for bankruptcy, handing itself over to a trust controlled by the states, cities and counties that have sued. Mundipharma would also be sold. Its value may have declined since Bloomberg’s last estimate based on negative publicity. Overall, these actions would generate $11.5 billion to cover the fallout from the opioid epidemic, according to people with knowledge of the situation.
Bloomberg’s calculation is conservative as it excludes dividends that Purdue may have paid prior to 2008, because the details weren’t public.
Generic drugmaker Rhodes Pharmaceuticals LP wasn’t previously valued as part of the family’s net worth. A Purdue spokesman said the company owns Rhodes Pharmaceuticals, which would go into the trust alongside the rest of Purdue.
The clan’s fortune once made them celebrated global philanthropists, with gifts to New York’s Metropolitan Museum of Art and London’s Victoria and Albert Museum. The donations have drawn increasing criticism in recent years amid reports linking the Sacklers to the opioid crisis. The family is composed of the heirs of Purdue co-founders Mortimer and Raymond Sackler.
“The stain of this historic episode will be long-lasting,” said Gene Grabowski, a partner at communications firm kglobal who specializes in crisis media relations. “The Sackler family and its decades of philanthropy will be overshadowed for at least a generation by its connection to the nation’s opioid epidemic.”
A representative for the Raymond side of the family didn’t immediately respond to questions about their wealth.
(Updates with Rhodes Pharmaceuticals in fifth paragraph.)
--With assistance from Anders Melin.
To contact the reporters on this story:
Tom Maloney in New York at [email protected];
Jef Feeley in Wilmington, Delaware at [email protected]
To contact the editors responsible for this story:
Pierre Paulden at [email protected]
Peter Eichenbaum, Mark Schoifet
