Cardinal Health
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Cardinal Health : Protests follow CEO resignation at Cardinal

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11/09/2017 | 11:51 am

HUNTINGTON - Protesters carrying signs with photos of people who've died from opioid overdoses gathered outside drug distributor Cardinal Health's annual shareholders meeting Wednesday in Dublin, Ohio, days after the CEO of the powerful drug firm announced his intentions to step down from his role this year.

Pressure from investors and the continuing filings nationwide of lawsuits seeking to remedy the nation's opioid epidemic may have led to Monday's announcement that CEO George Barrett will leave his position at the end of the year but will remain as board chairman through November 2018.

According to a news release from Cardinal Health, Mike Kaufmann, 54, its current chief financial officer, will replace Barrett, 62, who had served as the CEO since 2009.

Cardinal is among the nation's largest drug distributors that have been criticized for failing to slow the flow of opiate painkillers that can lead to the use of heroin.

The drug manufacturer has been named in about 70 lawsuits across the country accusing it and others of fueling the nation's opioid epidemic by pumping pills into states with no regard to public safety.

Cities and counties allege drug firms breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states over the past several years - a duty the lawsuits claim companies have under the Controlled Substances Act of 1970. They seek damages and reimbursement for "the costs associated with past efforts to eliminate the hazards to public health and safety."

In making Monday's announcement of a change in leadership, Gregory Kenny, Cardinal Health's lead independent director, did not specifically mention the lawsuits as a reason for the change, even as they are mounting across the country. Instead, he said "we have taken into account a wide range of factors, including the current practices of other organizations, as well as the views of our shareholders. The board will continue to evaluate this structure on a regular basis in service to its shareholders and other key stakeholders."

The lawsuits have grown to include 13 governments in the Tri-State, including Scioto, Gallia and Lawrence counties and the city of Portsmouth in Ohio, and McDowell, Kanawha, Boone, Wyoming, Logan, Lincoln, Cabell and Wayne counties and the city of Huntington in West Virginia.

In total, there are 16 lawsuits in Ohio, 17 in West Virginia and 19 in Kentucky.

Kenny did praise Barrett's effort in leading the company for the last decade.

"Through his vision and many achievements, George has led the transformation of Cardinal Health into the leader it is today," he said. "Cardinal Health has built an outstanding portfolio of market-leading businesses across the health care continuum, positioning the company for continued growth, while establishing a culture committed to patient welfare and the highest ethical standards."

Last year the Dublin, Ohio-based company profited about $130 billion.

In the past decade, Cardinal has paid almost $100 million - including a $20 million settlement with the state of West Virginia - in settlements of lawsuits alleging the company failed to report suspicious orders of controlled substances while giving board members pay raises and bonuses.

According to a Bloomberg report, the Teamsters labor union had called on the drug distributor's investors to appoint an independent chairman. Teamsters, which helped organize the protest of about 40 people Wednesday, started a campaign last year for a reformation of governance of companies in the drug sales business after more than a million union members spoke out about personal effects of the opioid crisis.

The Teamsters said the board was inadequate in tackling its alleged decade-long role in fueling the opioid crisis.

The union is hoping for more accountability from companies accused of fueling the U.S. opioid crisis, which President Donald Trump has declared a national public health emergency.

A similar request had been made of McKesson Corp., another distributor named in the West Virginian suits earlier this year, which Teamsters said led to the board adopting a policy that will split the CEO and chairman job roles once current chairman and CEO John Hammergren steps down.

The Associated Press contributed to this report.

Follow reporter Courtney Hessler at and via Twitter


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