West Virginia Settles Opioid Lawsuit with McKesson for $37M

May 2, 2019

West Virginia has reached a $37 million settlement with the drug distributor McKesson in a lawsuit accusing the company of shipping millions of suspicious orders for painkillers to the state as it was being ravaged by the opioid epidemic.

A Thursday news release from Gov. Jim Justice and Attorney General Patrick Morrisey said the payment is thought to be the country's largest state settlement against a single pharmaceutical distributor. However, U.S. Sen. Joe Manchin criticized the settlement, suggesting it went easy on McKesson.

It's one of many settlements with the drug industry in West Virginia, which has the nation's highest opioid overdose rate. The state has received about $84 million through settlements with companies in lawsuits stemming from the national opioid crisis, according to the attorney general's office.

The McKesson case, filed in 2016 in a West Virginia circuit court, alleged that the company flooded counties in the state with large amounts of opioids without efforts to prevent illegal diversion of the drugs.

In one example from the suit, McKesson sent about 1.4 million opioids to Grant County between 2007 and 2012 — enough to provide every man, woman and child there with 118 painkillers.

McKesson issued a statement denying wrongdoing and says it is committed to ending the opioid epidemic.

"McKesson is committed to working with others to end this national crisis, however, and is pleased that the settlement provides funding toward initiatives intended to address the opioid epidemic," the statement said.

U.S. Sen. Joe Manchin slammed the settlement in a statement, calling it a "sweetheart deal" for McKesson.

"The governor and attorney general either don't know how to negotiate, don't understand the scope of this problem or don't care about the impact this epidemic has had on the state of West Virginia," said Manchin, a West Virginia Democrat, who noted that McKesson made more than $208 billion last year. "Either way, they have failed our state."

In 2017, McKesson agreed to pay a $150 million civil penalty for allegedly failing to report and fulfilling suspicious orders for drugs placed by pharmacies, including many in West Virginia, according to the U.S. Department of Justice.

"The abuse of prescription drugs has rampantly spread throughout our communities," said Karl C. Colder, then the DEA's Special Agent in Charge in Washington, when announcing the 2017 penalty. "This abuse has directly resulted in the escalation of heroin addiction and related overdoses."

In 2008, the company agreed to a $13.25 million civil penalty for similar violations.

Hospitals in West Virginia have also recently taken steps to hold the drug industry accountable for the opioid crisis.

Nearly 30 hospitals in West Virginia and 10 of their affiliates in Kentucky banded together earlier this week to sue some of the country's largest opioid companies, saying they inundated Appalachia with powerful painkillers and forced medical centers to deal with the financial repercussions. The case is thought to be the first time a large group of hospitals in a state has teamed up to take legal action against opioid firms, according to the attorney representing the hospitals.

About 2,000 lawsuits have been filed nationwide against the drug industry over the opioid crisis by state and local governments, American Indian tribes, unions, hospitals and others.

The U.S. Centers for Disease Control and Prevention says opioids were involved in nearly 48,000 deaths in 2017.