Judge summons CEOs to court over opioid settlement, sources say

The chief executives of a drugmaker and the three largest United States drug distributors have been summoned to appear before a US federal judge to discuss a proposal to resolve thousands of lawsuits alleging they fueled the US opioid crisis, a person familiar with the matter told Reuters News Agency on Thursday.

The order – by US District Judge Dan Polster in Cleveland, Ohio – came as distributors McKesson Corp, Cardinal Health Inc, AmerisourceBergen Corp and Israel-based drugmaker Teva Pharmaceutical Industries Ltd moved to reach a deal ahead of a trial before Polster that begins on Monday.

Those companies, along with Johnson & Johnson, have been negotiating a settlement that they value at roughly $50bn and that would allow them to resolve 2,600 lawsuits that have been filed nationally, largely by states and localities, people familiar with the matter said.

All of those companies except Johnson & Johnson are set to be defendants in the trial before Polster, who oversees the bulk of the litigation. Polster has pushed for a deal that could “do something meaningful to abate this crisis”.

The companies have been discussing the settlement with four state attorneys general whose cases are not before Polster, sources told Reuters on Wednesday. Lawyers for the local governments say they have not decided whether to back it.

Under the proposal, McKesson, AmerisourceBergen and Cardinal Health would pay $18bn over 18 years and Johnson & Johnson would pay $4bn, according to two people familiar with the matter.

Teva has offered to give away medications it values at $15bn as part of an overall deal it values at roughly $28m. Under that deal, the company would also provide distribution services, the sources said.

Spokespeople for Cardinal CEO Mike Kaufmann and AmerisourceBergen CEO Steven Collis declined to say if they would be in Cleveland on Friday. Representatives for Teva CEO Kare Schultz and McKesson CEO Brian Tyler did not respond to questions about whether they would be in court.

Opioids were responsible for roughly 400,000 overdose deaths in the US from 1999 to 2017, according to the US Centers for Disease Control and Prevention.

The lawsuits accuse drug manufacturers of deceptively marketing opioids in ways that downplayed their risks, and drug distributors of failing to detect and halt suspicious orders. 

The companies deny wrongdoing.

The cases prompted OxyContin maker Purdue Pharma LP to file for bankruptcy protection in September after reaching a tentative deal it says is worth at least $10bn to resolve the cases.