BREAKING NEWS: According to people familiar with the situation, JP Morgan Chase & Co., the largest U.S. bank by assets, has today cut ties with OxyContin maker Purdue Pharma LP over their alleged role in the U.S. opioid crisis.
JP Morgan is the most high-profile corporation to decide to separate itself from the Oxycontin maker and its wealthy owners, the Sackler family. This news comes in the midst of thousands of lawsuits maintaining the company pushed highly addictive pain killers while downplaying the abuse and overdose risks associated with these painkillers.
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In March, JP Morgan, whose commercial bank managed Purdue’s cash and bill payments, gave Purdue six months to find another bank. Purdue picked Comerica Inc of Dallas to handle it’s financial transactions, according to sources.
JPMorgan told Purdue that reputational risks associated with the public backlash against the drug maker informed its decision to cut business ties, the sources added.1
This decision by JP Morgan highlights a push among banks in the U.S. to reassess their relationships with clients and industries, and is a direct response to the growing political debate and discussion over matters like mass shootings and detention of immigrants.
While JP Morgan and Comerica declined to comment, Purdue said in a statement:
“Purdue is a streamlined organization with an exciting pipeline of new medicines and significant cash reserves. The company has multiple banking relationships and will not have any interruption to its banking and financial service needs.”1
The U.S. Food and Drug Administration has approved warning labels for Purdue’s drugs that state the risk of abuse that is inherent when treating pain. According to Purdue, this is reason enough to clear them of any contribution to the opioid crisis that is currently gripping the United States. They argue that heroin and fentanyl are the more compelling offenders in the opioid crisis.
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Health experts, however, have stated many times that people turn to fentanyl and heroin AFTER initially becoming hooked on prescription painkillers.
Currently Purdue, based in Stamford, Connecticut, faces approximately 2,000 lawsuits that accuse the company, and more often the Sacklers, of aggressively marketing their prescription opioids, all while misleading prescribers and consumers about the serious risks associated with their prolonged use.
The U.S. Centers for Disease Control and Prevention reports that between 1999 and 2017, nearly 400,000 people have died after overdosing on opioids, and more than half of the deaths stemmed from prescription painkillers.
As we previously reported, less than two months ago (in March) the Sackler family reached a $270 million dollar settlement with the state of Oklahoma. Next Tuesday, Oklahoma is taking to trial two other drug makers they claim helped fuel the opioid crisis. In addition to Oklahoma, dozens of other states have pending lawsuits against Purdue. Some of the cases are against the Sacklers, who made a monetary contribution to the settlement in Oklahoma without being defendants in the case.
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The Sacklers are longtime philanthropists. However, that doesn’t appear enough to keep universities, museums and numerous nonprofits from refusing their contributions and reevaluating their relationship with them.
In New York, The Metropolitan Museum of Art, which has a wing named for the Sacklers, and the American Museum of Natural History, said earlier this month they had ceased accepting contributions from the family.1
Purdue isn’t ruling out bankruptcy. Their CEO, Craig Landau recently said “bankruptcy filing remained an option for the company to address potential liabilities from widespread litigation”.1
Cutting ties with Purdue is the most recent in a string of moves by JP Morgan designed to steer clear of hot political topics. The company announced in January it would stop financing private prison operators, presumably due to protests over the hand they play in detaining undocumented immigrants.
Others are close behind. Tim Sloan, the then CEO of Wells Fargo, told a congressional panel in March the bank was severing associations with private prison operators. Meanwhile, last year Citigroup placed stipulations on firearms for retailers who do business with the bank after the horrible deadly shooting in Parkland, Florida. And an executive with Bank of America Corp stated last year that the bank was moving away from financing military-style firearms for civilians.
These are all steps in the right direction on a very long road.
