A collaboration of journalists from eight countries has today published an investigation into the international pharmaceutical businesses ultimately owned by the Sacklers, the family behind the OxyContin prescription painkiller that became emblematic of the early phase of the U.S. opioid crisis, which has killed hundreds of thousands of Americans.

It reveals how even though the Sacklers’ U.S. business unit, Purdue Pharma, declared bankruptcy in 2019, the family’s broader drugs empire in 120 countries has continued to sell massive quantities of pain pills, raking in hundreds of millions of dollars in profits.

The World of Pain investigation comes at a critical juncture for lawyers trying to pressure the Sacklers into handing over billions of dollars—made when Purdue was highly profitable—to victims ravaged by America’s opioid epidemic. U.S. courts have set a deadline of September 27, by which the Sacklers must settle negotiations to stave off the threat of lawsuits, many alleging the family illegally profiteered from the opioid crisis.

OxyContin is an opioid tablet, similar in strength to morphine, prescribed for relief from moderate to severe pain. In some formulations it can be crushed or otherwise abused to give a high that has been compared to heroin. Its potential for abuse, combined with Purdue's aggressive marketing, at one point helped OxyContin become America's most prescribed brand-name narcotic.

The Sacklers have always denied wrongdoing but have offered to sell off their international companies, known collectively as Mundipharma, to finance a multi-billion dollar settlement with Purdue creditors. The family has already reached a parallel $225 million civil settlement with the U.S. Justice Department, again without admitting wrongdoing.

Up to now, there has been little clarity over how much will likely be raised from the Mundipharma sell-off and what proportion of proceeds should go to opioid victims. The financial analysis in the World of Pain investigation give some insight into the profits extracted from the Mundipharma group, and its potential valuation.

Findings are published today in The Washington Post and The Examination in the U.S., Paper Trail Media in Germany, The Initium in Singapore and Metrópoles in Brazil among others. They include extensive revelations about Mundipharma’s opioid marketing practices around the world, from China to Italy, Germany to Brazil.

Finance Uncovered’s role in the collaboration was to conduct a forensic analysis of Mundipharma by gathering, where possible, profits, turnover and dividend payments from the financial statements filed by dozens of affiliated companies in multiple jurisdictions. The result shines a light into key parts of the Sacklers’ privately-owned and byzantine-structured drug empire.

Among the findings, the analysis showed that Mundipharma made $531 million in profits from just nine of its 170-plus companies between 2020 and 2022. Profits for the entire Mundipharma empire, including companies sitting in secretive tax havens, are almost certainly much higher.

In a written statement to journalists working on the World of Pain project, Mundipharma said that they “recognise that there are risks associated with the use of prescription opioid medications” and work closely with government authorities and scientific experts to prevent the abuse of their products.

Setting out why they are prepared to pay out billions, the family has said: “The Sackler family wants to contribute positively to addressing the opioid crisis in a constructive, immediate way and regrets that OxyContin, which continues to help people suffering from chronic pain, unexpectedly became part of the opioid crisis.”

Legal battle over billions

Today's investigation is published as lawyers for Purdue creditors and for the Sacklers wrangle over the family’s extraction of more than $10 billion from the controversial U.S. business in the years before it filed for bankruptcy amid a flood of OxyContin legal claims.

As early as 2007, Purdue was linked to a wave of addiction and overdosing after it pleaded guilty to criminal offences relating to the misrepresentation of OxyContin as a drug less prone to abuse and addiction than other strong opioids.

Then, as now, the Sacklers have insisted criminal activity at Purdue was kept from them. They have noted investigations found no suggestion of wrongdoing by members of the family.

Some 13 years later, Purdue once again pleaded guilty to criminal offences, this time relating to different unlawful marketing strategies dating from 2007 to 2017. Again, the Sacklers vigorously denied wrongdoing.

Now opioid victims, families of the deceased, cities, states and others impacted by the crisis in the U.S. have accused the Sacklers of a deliberate and illegal plot to drain profits out of Purdue and spiriting the money overseas in order to keep it beyond the reach of potential Purdue bankruptcy claimants and are trying to use the U.S. courts to claw back some of this money.

The family vehemently denies these “fraudulent transfer” allegations, and point out that nearly half the funds that left Purdue went to pay taxes.

They have set up a website called judgeforyourselves.info where readers are told how the courts, US government agencies and the media have misinterpreted the Sacklers’ words and deeds.

At the same time, however, they have signaled their readiness to pay out billions of dollars to victims of the opioid crisis in order to make the torrent of lawsuits stop.

Creditors thought they had a deal with the Sackler family two years ago. But in July, they were forced back to the negotiating table when the Supreme Court ruled the agreement unlawful.

At issue was a controversial deal in which most creditors were prepared to ask the bankruptcy court to release the Sacklers from the threat of lawsuits in exchange for the family paying up to $5.77 billion over 18 years. The Supreme Court insisted that, without the agreement of all creditors, any such deal was unlawful since the Sacklers themselves were not in bankruptcy.

Indeed, the family is very far from bankrupt. One wealth expert, hired by the Purdue creditors, was given access to confidential information on the Sacklers’ finances and concluded that, even after Purdue filed for bankruptcy, the family still retained a net worth of $10.7 billion in 2020.

Among the Sacklers’ most prized assets is Mundipharma, a sprawling pharmaceutical empire, selling opioid painkillers such OxyContin and other products outside the United States.

As legal teams acting for Purdue creditors and for the Sackler family attempt to thrash out a fresh deal, understanding the health and value of the Mundipharma network has become vital, as any revised settlement is likely to be financed by a slow disposal of all of the family’s remaining pharmaceuticals companies outside the U.S..

A first-of-its-kind analysis of the Sackler’s global drug empire

Finance Uncovered’s analysis set out to paint a picture of Mundipharma’s financial performance following Purdue’s bankruptcy filing, including how much trade it was doing in key markets, whether it was generating profits, and, if so, whether such earnings were being extracted in dividends.

The unusual structure of Mundipharma complicated this analysis from the start. Most multinationals (even privately owned ones) are comprised of regional and functional subsidiary companies that are all ultimately arranged beneath a single holding company, led by one chief executive who is ultimately responsible for the management of the entire enterprise.

By contrast, Mundipharma consists of more than 170 companies, many of them divided into company clusters, known internally as groupings of “independent associated companies” or IACs. There is no holding company at the top of the “Mundipharma network”. Before filing for bankruptcy in 2019, the Sacklers’ U.S. business Purdue Pharma was also part of this network. It is now wholly independent.

Although those working for the Sacklers have set up a website called mundipharma.com, it gives very little financial or corporate information — not even the names of companies included under this umbrella term. However, as part of their settlement negotiations with Purdue creditors, the Sacklers have listed more than 170 IACs, all ultimately owned by the Sacklers or various of their family trusts.

How these companies fit together into a single collaborative enterprise is complex. Even some of the Sackler family members needed it explained to them — a presentation prepared for a 2011 “Beneficiaries Meeting” at a hotel in Knightsbridge, London, included a 15 minutes explainer on “how the worldwide independent associated companies are structured,” according to the meeting agenda. It is one of several sealed documents from Purdue litigation, obtained by Paper Trail Media and shared with Finance Uncovered and others

Other internal documents claimed that, despite the absence of a single corporate and executive hierarchy, Mundipharma was gelled together by a “long tradition of unselfish and ‘for the best of the IACs’ cooperation”.

Following the Mundipharma money trail

For its analysis, Finance Uncovered worked off a list of more than 170 IACs disclosed by the Sacklers as a part of the Purdue bankruptcy case. Where possible, we used company registries and other open sources to identify where each of these units was incorporated and, where possible, the names of the immediate parent company for each.

This allowed us to plot out company clusters and eventually to identify many of the functions performed by each of these groupings.

After gathering dozens of the publicly available annual financial statements that companies belonging to the Mundipharma network are required to file with various countries’ corporate registries, Finance Uncovered then created a spreadsheet logging key data points for our selected Mundipharma companies: turnover, profit after tax, dividends, and related party income.

This only provided us with a partial picture because it excluded data from companies in the Mundipharma network registered in jurisdictions where such financial statements are not available to the public.

Because the turnover amount recorded by some companies included income from transactions with fellow companies within the Mundipharma group, special care was taken in the analysis to deduct any disclosed intra-group payments so as to get to the most accurate estimate of sales made to “real” customers, such as hospitals, pharmacies, government health agencies and independent wholesalers.

Our findings

Our analysis found that the Sackler’s non-U.S. companies—known collectively as Mundipharma—have continued to make significant sales outside the U.S. from a drugs portfolio which includes painkillers that use active ingredients oxycodone as well as morphine and tramadol.

In Europe’s five largest economies—Germany, France, the United Kingdom, Italy and Spain—the Sacklers’ main pharmaceutical sales companies recorded combined sales of $439 million in the three years from 2020 to 2022.

In Australia, sales over the same three years were $88 million and financial statements of a Singapore intermediary company suggest ultimate sales in China for the period were at least $302 million. The analysis was unable to capture sales figures for other important markets such as Canada, Japan and Latin America, as financial documents were unavailable.

Trawling through available financial statements, Finance Uncovered also tried to identify the main profit centres within the Mundipharma empire. One of the sealed documents obtained by PaperTrail Media confirmed the corporate structure that our analysis had identified.

It contained a chart (see below) that reveals how the Sacklers’ international drugs empire has pushed much of its income from an array of local sales companies that sell pills to customers, through supply chain companies based in the Netherlands, UK and Singapore, and onwards to intellectual property companies registered in the tax haven of Bermuda.

Finance Uncovered’s analysis was unable to obtain any significant financial information on the several companies Mundipharma registered in Bermuda. The remote North Atlantic island is a secrecy haven popular with many multinational pharmaceutical groups which used the tax-free jurisdiction to amass profits from valuable intellectual property assets such as trademarks and patents.

But despite only patchy availability of open source financial data, our analysis managed to identify nine significant Mundipharma profit centres, including six sales-focused companies in Europe and Australia and three distribution companies active across large parts of the world. Together, the nine logged profits of more than $531 million in the three years following Purdue’s bankruptcy.

A common mechanism for shuffling around profits inside big multinational drug companies is internal payments, made from one group company to another, in return for the use of intellectual property. Such transactions—for example, royalty fees for the rights to use a patented technology or a commercial trademark—are rarely disclosed in public documents. However, a sealed document from the Purdue litigation obtained by Paper Trail Media provides a glimpse into how such fees moved inside the Sackler empire in 2016.

The document shows that Purdue received a total of $36 million for the licensing of OxyContin sales around the world in 2016, implying international sales of the controversial drug outside America of $355 million, according to Finance Uncovered’s analysis.

The analysis found these sales were broken down geographically in accordance with the pie chart above. It further found that in 2016 the largest non-U.S. markets for OxyContin were Canada, China, Japan and the United Kingdom.

Unfortunately, we were unable to ascertain current OxyContin sales, as up to date figures were unavailable.

In a written statement, Mundipharma has said that current sales of strong opioids have reduced as a percentage of sales, as global business has diversified.

Finally, our analysis showed that five Mundipharma companies paid out dividends of at least $287 million to holding companies ultimately owned by the Sacklers since 2020.

Also, the Sackler empire has shared in proceeds from the sale of two businesses worth a combined $747 million.

More recently, the Mundipharma business in China has been put up for sale, with Reuters reporting that it could fetch more than $1 billion.

To date, most of the proceeds from Mundipharma asset sales have been held in escrow, earmarked for settling litigation and helping opioid victims, according to Mundipharma representatives and news reports. Reporters in the World of Pain project were unable to learn where the remainder of the disposal proceeds, or hundreds of millions of dollars worth of dividend payments, ultimtaely went.

If the Sacklers and Purdue creditors fail to reach a settlement acceptable under the terms set by the U.S. Supreme Court this month, the two sides will likely be heading for one of the most expensive and lengthy bouts of litigation in legal history.

* Finance Uncovered’s analysis of Mundipharma appeared in multiple articles published in the “World of Pain” series, a global investigation by The Examination, Paper Trail Media, Metrópoles, Investigative Reporting Project Italy (IRPI), The Initium, Der Spiegel, ZDF, Der Standard, Tamedia-Group and the Washington Post

* Fact checking of financials by Mago Torres (The Examination)

* Editing by Ted Jeory and Nick Mathiason