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The Unbelievable Story of America’s Deadliest Drug Lords

Trump’s “death penalty for drug dealers” plan was specifically designed to make you link the opioid crisis to immigrants and street dealers. But the reality is more cocktails than cartels.

Every 3 weeks, the opioid death toll beats out the death toll of 9/11.

It certainly seems like the kind of thing that would justify a serious response. So it wasn’t a total surprise when, six months ago Trump called a state of emergency… aaaaaand then we waited. And waited some more. Finally, in March (thousands of deaths later), we all got to hear the big plan for curbing the epidemic: death penalties for drug pushers. Because it’s working out so great in the Philippines.

But while that grand statement was supposed to conjure shitty stereotypes and images of this guy, a new report shows the truth you may have already guessed: the six biggest opioid pushers and profiteers in the country are some of Trump’s best buddies and biggest donors, members of the American glitterati. Some of them even look like the polar opposite of Trump: well-spoken, impeccably dressed old money, usually hiding behind faux philanthropy.

For generations, these five individuals — and one very wealthy family — have operated in near-anonymity, while low-level heroin dealers, uninformed pharmacists, and miseducated doctors take the fall for the crisis these billionaires created.

But here, thanks to the incredible report from a coalition of patient groups, activists, organizers, and researchers called Hedge Clippers, is the rundown on the sick, twisted Opioid Pusher Hall of Fame.

The Sacklers: Built a $14 billion fortune pushing Oxycontin while covering up how addictive it is.

1. The Sackler Family

Arguably the most visible of the six key cartel leaders on this list, the Sacklers are the heirs and owners of Purdue Pharma, which developed and sold the powerful opioid OxyContin. Here’s a fun story about Purdue: when the FDA first approved OxyContin, they took the bizarre step of allowing the company to include an insert that said the pill’s formula was “believed to reduce the abuse liability of a drug” — despite the fact that Purdue hadn’t done a single study on the drug’s abuse potential.

Less than two years after, the FDA official that oversaw the approval left the FDA for a job at… Purdue Pharma. So that pretty much sums up the Sacklers.

Today, the family of Arthur Sackler, the eldest of the brothers who bought Purdue Pharma in 1952, is trying to distance itself from the opioid profiteering of his brothers and their descendents; Elizabeth Sackler recently claimed that “none of his descendants have ever owned a share of Purdue stock nor benefitted in any way from it or the sale of OxyContin.” That, of course, is not true: recently revealed court records show that his heirs did indeed profit from Arthur’s involvement and from the sale of OxyContin.

Though Arthur Sackler passed away in 1987, and his estate sold his share in the company to his two brothers shortly thereafter, the terms of the sale left Arthur’s estate holding a note worth nearly $20 million. Two years after OxyContin was introduced, sending Purdue’s profits through the roof, Purdue paid that note off, leaving Arthur’s descendants $20 million richer. I’d call that “benefitting from” the stock, wouldn’t you?

John Hammergren: CEO of McKesson Corp.

2. John Hammergren

John Hammergren, the CEO of drug wholesaler McKesson Corporation, has made $692 million from his role in the last decade, at one point making him the highest-paid CEO in the country. During that decade, McKesson was pouring obscene amounts of opiates like oxycodone and hydrocodone into communities across the country, fuelling an epidemic of addiction and death.

In Kentucky in particular, McKesson’s conduct has been so outrageous that the state is suing them for it, saying (correctly) that McKesson knowingly funneled outrageous amounts of opiates to pharmacies all over the state. In just one county, the corporation dumped over 18 million doses of opioids between 2010 and 2016: about 477 pills per resident. Floyd County is now on the CDC’s list of counties at risk of a public health crisis.

The really sick part? Kentucky brought the suit in January 2018 — almost one year to the day that McKesson paid a $150 million to settle a totally separate case with the DOJ for doing the exact same thing: failing to report suspicious orders. Apparently, to Hammergren, it was worth it.

James Flynn: invested billions in opioid production and opioid addiction treatment centers.

3. James Flynn

The top two holdings in the portfolio of the James Flynn’s Deerfield Management are the opioid distributor Mallinckrodt, and generic morphine and fentanyl manufacturer Mylan; they also invest in the above-mentioned McKesson. James Flynn is a real class act, is what I’m saying.

But Flynn’s real evil genius lies in the fact that he’s figured out how to profit from widespread addiction and death on both ends of the crisis: Deerfield invests in two major for-profit addiction treatment chains, American Addiction Centers and Recovery Centers of America. Do not for one second mistake that for human decency, and definitely don’t picture low-income Kentuckians getting the help they so desperately need.

RCA’s luxury centers will run you more than $24,000 per month, but you likely won’t get your money’s worth. RCA facilities in Massachusetts were recently investigated by the Boston Globe, which found that staffers were overworked and underpaid; it also found that basic services like counseling and, you know, actual supervision of patients weren’t being provided at all. AAC is no better, with employees in New Jersey going on strike over their terrible working conditions. Most egregiously, at least two patients in an RCA facility in Massachusetts have died in just the past year.

James Flynn, in other words, has pulled off the incredible feat of profiting off addicts from before they even get addicted, until they die while seeking treatment.

John Kapoor: Billionaire founder of Insys Pharmaceutical

4. John Kapoor

John Kapoor is a doozy. Founder of Insys Therapeutics, a drug company based in Chandler, Arizona, Kapoor is also the inventor of Subsys, an oral fentanyl spray. Insys’ claim to fame is their wildly misleading and aggressive marketing of Subsys, which actually led to the arrest of Kapoor and six other former executives in 2017.

But even jail time won’t bring people back from the dead, and Kapoor has a lot of death on his hands.

Subsys, for example, was only approved for a single, very specific use by the FDA: treating “breakthrough pain” for cancer patients, i.e. pain that wasn’t responding to gentler, safer pain meds. But that market turned out to be pretty small. So Insys pulled one of the most appalling stunts on this list: it trained its sales reps to pose as doctors, then manipulate insurance providers into covering the drug for patients who didn’t actually fit that bill. The scam allowed Subsys to be distributed en masse to people who not only didn’t have “breakthrough cancer pain,” but didn’t even have cancer.

A recording caught one Insys employee lying to an insurance company rep about a patient named Sarah Fuller, conning the rep into believing Fuller had cancer and thus approving the drug for her. Fifteen months later, she was dead — from a fentanyl overdose.

John Paulson: Major investor in Percocet and Fentanyl

5. John Paulson

John Paulson, unlike the Sacklers and Kapoor, has managed to keep a respectable distance between himself and the source of his blood money. He runs the hedge fund Paulson & Co., which has made Paulson and his buddies filthy rich off the opioid crisis, all while looking as innocent as any generic Wall Street player (admittedly a low bar).

The fund’s holdings are a Who’s Who of opiate profiteers: a $525.9 million stake in Mylan, which makes generic morphine and fentanyl; a $310.6 million stake in Allergan, which produces the name brand opioids Kadian and Norco; a $82.8 million stake in Mallinckrodt, a major drug distributor; and a $55.6 million investment in Endo, which makes Opana and Percocet.

Paulson has used his billions of dollars to do the same kind of “reputation laundering” that the Sacklers are famous for, making big donations all over the place, including the largest donation in the history of Harvard University – $400 million. But at the end of the day, Paulson clearly values power and cash over optics: he has also been a donor and advisor to Donald Trump.

John Bonderman: Major investor in Percocet and Opana manufacturer Endo

6. David Bonderman

A cool story about investor David Bonderman is that he had to leave his seat on the board of directors of Uber after making sexist comments at a board meeting; the purpose of that meeting — and I’m not making this up — was to discuss accusations of a corporate culture of sexual harassment at Uber.

Bonderman too keeps himself at arm’s length from his opioid blood money, raking it in through his role running the hedge fund TPG Capital. TPG, like Paulson & Co., is a major investor in Endo Pharmaceuticals, the makers of Opana (a name-brand oxymorphone) and Percocet (a combination of acetaminophen and oxycodone).

Endo’s claim to fame goes back to when the FDA was considering approving a generic version of Endo’s brand-name Opana. In a desperate move to keep a cheap rival off the market, Endo claimed the drug shouldn’t be approved because it was too easy to abuse, even pulling their own version off the market to convince the FDA they were just looking out for innocent people.

They weren’t, of course: before yanking their Opana, they had created a very slightly tweaked version of the same drug. The only difference was a hard coating, which Endo said made the pill impossible to crush and snort, making it less easy to abuse. But their plan backfired when the FDA told them they couldn’t sell that one either.

Was Endo deterred? Nope — they entered an agreement with a company called Impax Labs to split the profits of a generic, entirely crush-able version of Opana: the drug they had originally argued shouldn’t be sold, because it was too easy to abuse.

The Fix

So now what? We’ve got the bad guys, we’ve got the methods, we’ve got the motives, and we’ve got millions of victims — what do we actually do to fix it?

This is a billionaire-created crisis. Some guys looking at a spreadsheet crunched the numbers and weighed the risks — the potential fines, the “donations” to political campaigns — against the rewards, and the rewards came out on top. So it seems only fair that the people who created this problem use their blood money to start setting it right. It could be a win/win: we get the money we need for programs and resources to start stemming this tide, and they get real disincentives — no more measly $10 million fines — to stop messing around with peoples’ lives.

The Hedge Clipper campaign that put together the report on the profiteers also proposed some pragmatic, do-able options to get the cash: an excise tax, and a windfall profits tax.

The Excise Tax

An excise tax is a sales tax that happens at the seller’s end, not the buyer’s; that is, we could impose a small tax on the big drug distributors per each milligram of opioids they sell. It avoids putting undue burden on people who genuinely need pain meds, but provides an incredible disincentive for these distributors to pump entire towns full of deadly drugs. One of the best parts about this plan is that we don’t need Trump or the federal government at all; the tax could be imposed at a state level. Some states have already gotten the ball rolling, with Alaska, West Virginia, California, Delware, and New York all seriously considering excise taxes on opioid pushers in some form or another.

The Windfall Tax

But much more satisfying — and lucrative — than an excise tax would be the windfall tax. “Windfall tax” is just a fancy name for taxing huge amounts of money made because of manipulative conditions. It sets a baseline for “normal” sales: say, the 1999 level of opioid sales. Then, adjusting for things like population growth, it imposes a much heavier tax on manufacturers and distributors for sales that soar above that level.

It makes a lot of sense for opioids, because so much of this crisis can be chalked up to Big Pharma’s incredibly aggressive and often misleading marketing. Like an excise tax, a windfall tax also would inherently disincentivize drug makers from doing everything they can to sell as many fatally addictive pain pills as possible.

No one should get to profit off death, crime, and human suffering, and then get to chill by the pool on their yacht while the government wages a phony war on drug lords. Not even in a for-profit healthcare system. The solutions are there, and the roadblocks aren’t as big as we think. We just need to be willing to get up and step over them.

A major, major thank you to the Hedge Clippers for the deeply researched report behind this piece.

Written by Caitlyn McClure

Caitlyn is Chief Editor and Director of Development for Other98.