McKesson CEO Among Four Summoned to Court For Opioid Talks
(Bloomberg) -- The CEOs of McKesson Corp., Cardinal Health Inc. and two other companies seeking to settle legal claims over their handling of opioid painkillers were summoned to meet with a judge in hopes of hammering out a final deal, according to two people familiar with the matter.
U.S. District Judge Dan Polster in Cleveland, who is overseeing the first federal trial over the U.S. opioid epidemic, demanded that the chief executive officers appear in his court on Friday to discuss their settlement proposals, according to the people, who asked not to be identified because the negotiations are confidential.
In a sign that talks may be entering their end-game, Polster made his demand on Wednesday as jury selection got underway in the trial, the people said. Opening statements are scheduled for Oct. 21 in the first case to test local governments’ claims that opioid makers and distributors fanned demand for the highly addictive pain medications.
The four companies -- McKesson, Cardinal Health, AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd. -– are seeking to resolve all opioid suits filed against them by U.S. states, cities and counties. If their settlement proposals are accepted, they’d be removed from the current trial and any further opioid litigation.
The chief executive officer of a fifth defendant at the trial, Walgreens Boots Alliance Inc., wasn’t summoned to court because the pharmacy chain has shown no interest in settling, the people said. But another executive will attend, a third person familiar with the meeting said.
In all, more than 2,000 municipalities have sued pharma companies to recoup billions of dollars spent battling the fallout from opioid addiction and overdoses. Next week’s trial is on behalf of just two Ohio counties.
Kelley Dougherty, a spokeswoman for Teva, declined to comment on whether CEO Kare Schultz would be in Cleveland for the meeting. Gabe Weissman, an AmerisourceBergen spokesman, also declined to say whether CEO Steven Collis would be making the trip.
Spokeswomen for McKesson and Cardinal Health didn’t immediately return calls and emails late Wednesday about whether McKesson CEO Brian Tyler and Cardinal Health CEO Michael Kaufmann would be present. Jim Cohn, a Walgreens spokesman, said the company doesn’t comment on pending litigation.
Friday’s meeting, which will include state attorneys general who have sued separately and are backing the deals, may solidify a framework for resolving all the cases in a settlement that could wind up being worth more than $50 billion, the people said.
McKesson, Cardinal Health and AmerisourceBergen are offering to pay a combined $18 billion over 18 years to wipe out opioid suits filed against the distributors, the people said. Teva is offering more than $15 billion in generic drugs, including those that help fight opioid overdoses, the people said.
Drugmaker Johnson & Johnson has offered to resolve all the cases against it for $4 billion. CEO Alex Gorsky won’t be present for the Cleveland meeting because the company paid $20.4 million to settle the claims against it by the two counties heading to trial next week, the people said.
Another opioid maker, Purdue Pharma LP, sought bankruptcy protection in September to facilitate a $10 billion settlement proposal. That deal guarantees $3 billion from the company’s owners, the Sackler family, and relies largely on future revenues generated by sales of drugs.
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