I think your best bet is an intervention of some sort with multiple family members. Talking with your brother on your own may be perceived as some sort of one-on-one attack. If more than one of you come to him as a group, then maybe it will help them see that this issue has reached beyond their nuclear family.
I don't think you need to make threats, like no longer inviting them to functions, and it's more important to express your concerns than to try and tell them what they're doing wrong.
It would be a good idea to actually write out notes, or even exactly what you want to say to get the wording right. Try it out on friends and see if they have wording suggestions. Gentle concern may help?
Bottom line though is that your concern and suggestions may fall on deaf ears and go without action. I think you will know when the time is right when you have decided that you cannot be around them at family functions any longer. Or when you're willing to be shunned by your brother because he's unwilling to listen.
You're in a tough spot! We have had similar issues with friends, but have been able to just stop spending time with them. Not so easy for you. Good luck to you!