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More lawsuits are hanging over the billionaire family that made its fortune in opioids

Key Points
  • The Sackler Trust, the family's charitable organization, has donated millions of dollars to charities and institutions, but announced this week it was halting new donations in the U.K.
  • On Thursday, the New York attorney general expanded an existing lawsuit against Purdue Pharma to add members of the family as defendants.
  • Just a day earlier, Purdue Pharma reached an agreement with the Oklahoma attorney general's office to settle a lawsuit that accused it of helping ignite the nationwide opioid crisis.
Bottles of Purdue Pharma L.P. OxyContin medication.
George Frey | Bloomberg | Getty Images

The Sacklers — the billionaire family whose privately held company is accused of playing a central role in the U.S. opioid epidemic — are stepping away from philanthropy as negative press and legal action mount against them.

Several members of the Sackler family own and control Purdue Pharma, the pharmaceutical giant facing a string of lawsuits over its alleged role in the crisis. In some of the litigation, members of the family have been named alongside the company as defendants.

The Sackler Trust, the family's charitable organization, has donated millions of dollars to charities and institutions, but announced this week it was halting new donations in the U.K.

In a statement emailed to CNBC Monday, trust chairwoman Theresa Sackler said she was "deeply saddened" by the addiction crisis in the U.S., adding that she continued to reject the "false allegations" made against Purdue and several members of the Sackler family.

"The current press attention that these legal cases in the United States is generating has created immense pressure on the scientific, medical, educational and arts institutions here in the U.K., large and small, that I am so proud to support. This attention is distracting them from the important work that they do," she said.

"The Trustees of the Sackler Trust have taken the difficult decision to temporarily pause all new philanthropic giving, while still honoring existing commitments. I remain fully committed to all the causes the Sackler Trust supports, but at this moment it is the better course for the Trust to halt all new giving until we can be confident that it will not be a distraction for institutions that are applying for grants."

Later on Monday, The Dr Mortimer and Theresa Sackler Foundation – the charity overseen by other members of the family – said in a statement that it would also suspend new donations in line with the Sackler Trust's decision.

VIDEO0:5900:59
Here's the Sackler family's statement on Purdue Pharma's $270M settlement

The opioid crisis

Purdue is the producer of OxyContin, a prescription drug used to treat moderate to severe pain that first came on the market in 1996. OxyContin is around 50 percent stronger than morphine. The company has been accused of downplaying the drug's addiction risk and advising doctors to prescribe the highest dosage of the painkiller because it was more profitable.

On Thursday, the New York attorney general expanded an existing lawsuit against Purdue Pharma to add members of the family as defendants. Just a day earlier, Purdue Pharma reached an agreement with the Oklahoma attorney general's office to settle a lawsuit that accused it of helping ignite the nationwide opioid crisis.

According to the Centers for Disease Control, almost 218,000 Americans died from prescription opioid overdoses between 1999 and 2017, while a study published earlier this year claimed Americans are now more likely to die from an opioid overdose than a car accident.

A spokesperson for Purdue told CNBC last week that the firm was "deeply concerned" about the opioid crisis and had led industry efforts to combat prescription drug abuse.

"We recognize that more needs to be done and that's why we launched a long-term initiative that continues to build as we pursue a range of solutions that we believe will have a meaningful impact," the spokesperson said in an email.

Rising pressure

The Sacklers' suspension of U.K. donations comes amid mounting pressure on institutions to refuse funding from the family.

Last week, the trust rescinded an offer of a $1.3 million grant to the U.K.'s National Portrait Gallery to "avoid being a distraction" to the museum. Days later, art gallery group Tate announced it would no longer accept gifts from the Sacklers.

VIDEO0:4600:46
Purdue Pharma settles Oklahoma opioid case for $270 million

The Sacklers also saw their money expelled from hedge fund Hildene Capital Management this month, the Wall Street Journal reported. In a statement to the Journal, hedge fund manager Brett Jefferson said: "The weight on my conscience led me to terminate the relationship."

Campaigners are also calling on institutions to strip the family's name from their buildings. Earlier this year, photographer Nan Goldin's campaign group Sackler PAIN led a protest against Sackler funding at New York's Guggenheim Museum.

The Guggenheim — which received $9 million in gifts from the Sacklers between 1995 and 2015 — confirmed to CNBC on Friday last week it would no longer accept Sackler donations. Elsewhere, Daniel Weiss, president and CEO of The Metropolitan Museum of Art, told CNBC via email that the Met was conducting a review of its gift acceptance policies and had not received a gift from the Sacklers for two years.

Despite the shift away from Sackler funding, institutions have yet to make moves to remove the family's name from their walls — and they may be unable to. Harvard University's Arthur M. Sackler Museum and the Smithsonian's Arthur M. Sackler Gallery were both funded by donations made in the 1980s, decades before OxyContin was invented.

"Given these circumstances and legal and contractual considerations, Harvard does not have plans to remove Dr Sackler's name from the museum," a Harvard spokesperson said via email.

Similarly, a spokesperson for The Smithsonian told CNBC the museum had a legally binding contract which meant its Arthur M. Sackler Gallery would keep its name "in perpetuity."

"(Our) new policy limits the naming of a space to a term of 20 years or until (its) next major renovation," they said.

Speaking to CNBC on the phone last week, author L.A. Kauffman — a member of Sackler PAIN — said the group would continue its "fight for accountability."

"Museums (are) white washing the reputation of a family that is directly responsible for the deaths of hundreds of thousands of people … But the tide is turning against them," she said.

VIDEO3:1203:12
Here's what you need to know about Purdue Pharma and the opioid crisis

Considering bankruptcy

Earlier this month, reports emerged that Purdue was exploring bankruptcy to protect its assets against thousands of lawsuits relating to OxyContin and the opioid crisis.

Last week, more than 600 cities, counties and Native American tribes from across the U.S. filed a federal lawsuit against eight members of the Sackler family. The lawsuit accused the family members of using deceptive marketing to increase their profits from Oxycontin, according to CNN.

The lawsuit, which reportedly seeks compensation and "corrective advertising statements," is the latest in a string of legal action against both Purdue and members of the Sackler family.

Meanwhile, the state of Massachusetts filed a suit in January naming the company and eight members of the Sackler family, among others, as defendants. The court submission, seen by CNBC, claimed Purdue "created the epidemic and profited from it through a web of illegal deceit."

A spokesperson for the Mortimer and Raymond Sackler family said in a statement that the allegations made against the family were strongly denied and would be "vigorously defended" in court.

Forbes magazine estimated the Sacklers had a net worth of $14 billion in 2015.