Endo International has met shareholder requests for a public account of how the company’s board oversees the risk of opioid sales, once a prime moneymaker for the pharmaceutical company and now subject to more than 1,500 lawsuits from local governments and other groups nationwide.
A report by the company, disclosed on its website Nov. 30, details new measures put in place this year to recoup incentive pay from senior managers in cases of gross negligence and fraud. The report also describes the role of Endo’s board in monitoring company compliance with federal law, and overseeing the “management of risks associated with the evolving opioid litigation.”
The document comes after talks started last year between Endo — which has its U.S. headquarters in Malvern — and a coalition called Investors for Opioid Accountability. The group is made up of 53 asset managers and retirement funds with $3.4 trillion under management. It has been pressing opioid distributors, manufacturers, and retailers to show that their boards of directors are keeping tabs on the risks that come from the business of opioids.
“What we’re hoping to get out of these companies is a promise that they’re carefully overseeing what they’re doing, and that the board is taking responsibility for that oversight, as well," said Donna Meyer, who co-founded the coalition and is the director of shareholder advocacy for Mercy Investment Services.
She called Endo a model for other companies: “They have a comprehensive, public policy and are committed to following it.”
Cardinal Health and Assertio Therapeutics have also responded to the coalition by releasing reports on board oversight. McKesson published one after similar discussions with shareholders, before the coalition formed. Meyer said the coalition has also raised the issue with wholesale distributor AmerisourceBergen, and with Rite Aid, Walgreens, and CVS.
“This was a constructive engagement from the beginning," said Matthew Maletta, Endo’s chief legal officer. “There was never a contentious tone or dynamic to it."
In Endo’s case, the report also serves to recount the ways in which the company has largely eliminated opioids from its portfolio. Under chief executive Paul Campanelli, who assumed that post in September 2016, Endo has gotten rid of its entire sales force for opioids. In 2017, it voluntarily withdrew its opioid Opana ER from the market, following a request to do so by the FDA.
That drug generated “well over $100 million a year for us,” Maletta said. While the company still sells the painkiller Percocet, and some generic opioid products, total opioid revenue is no longer significant, he said.
“Endo recognizes that there’s an opioid-abuse crisis going on, and we have an important story to tell about our role in mitigating the crisis," Maletta said.
He acknowledged some initial hesitation to publish the oversight report, given all the lawsuits the company is facing. It’s common practice for a company to not even comment on pending litigation, and “some of the stuff in our report is germane to the litigation we’re involved in,” Maletta said.
“Our view is that we’ve done everything properly,” he added. "We deny the allegations in the complaints and we’re proud to talk about our business practices. Hopefully, other companies will follow suit.”