The state’s lawsuit accused McKesson Corp. of putting profits ahead of residents’ welfare by failing to investigate, report or stop suspicious drug orders as required by law, and fueling a widespread drug epidemic.
McKesson reported over $208 billion in revenue in the past fiscal year, making it the sixth-largest U.S. company. The giant distributor funneled enough hydrocodone and oxycodone to supply every legitimate patient with nearly 3,000 doses, state officials said.
Tiny Boone County, with a population of fewer than 25,000, received 1.2 million doses of hydrocodone and oxycodone between 2007 and 2012, the lawsuit claimed.
McKesson vigorously denied the allegations Wednesday. April Marks, a spokeswoman for the company, said in a prepared statement that the company “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.”
Under the settlement, McKesson will pay $37 million to West Virginia. Nearly half the amount is to be paid out within three business days of the case’s dismissal, with the remainder paid in annual installments over five years.
U.S. Sen. Joe Manchin, D-W.Va., disparaged the settlement as a “sweetheart deal” that “sells out” the state. “It’s pennies on the dollar to what McKesson cost our state,” Manchin said.
The state will use portions of the settlement money to “further the collective fight against drug abuse in West Virginia,” according to a statement released by Gov. Jim Justice and Patrick Morrisey, the state’s attorney general.
The money will support state initiatives including rehabilitation, job training and mental health programs.
More than 30 states, and more than 1,600 cities and counties and other entities, have filed lawsuits against drug distributors, manufacturers and pharmacies over their roles in the opioid crisis. But huge fines and settlements are nothing new for large drug distributors and may have little effect on their profits.
McKesson reached a $150 million settlement with the Department of Justice in 2017 over similar allegations and paid $13.25 million to settle other federal claims as far back as 2008.
The three largest drug distributors — McKesson, Amerisource Bergen and Cardinal Health — supply more than 90 percent of the nation’s drugs and medical products and are among the 15 largest U.S. companies by revenue.
McKesson has enhanced its monitoring of the distribution of controlled substances in recent years, Marks said, and uses sophisticated algorithms to check for suspicious orders and block shipments to drugstores that reach preset limits. Suspicious orders are reported to the federal Drug Enforcement Administration, she said.
In West Virginia, deaths caused by overdoses of hydrocodone and oxycodone increased 67% between 2007 and 2012. The state has the highest opioid overdose rate in the country, according to the Trust for America’s Health.
The state’s epidemic received national attention following a series of Pulitzer Prize-winning articles in the Charleston Gazette-Mail that highlighted the role of giant distributors, which transport drugs from the manufacturers to every hospital, clinic and drugstore.
The companies shipped enormous amounts of hydrocodone and oxycodone to poor rural counties in West Virginia, flouting rules requiring the distributors to report and halt suspicious orders of narcotics that signaled possible illegal use and diversion, the newspaper reported.
With the agreement Wednesday, drug companies and distributors have agreed to pay West Virginia about $84 million in all, the largest total settlement with pharmaceutical companies in the state’s history, a spokesman said.
The state already has settled lawsuits against Cardinal Health, for $20 million, and Amerisource Bergen, which will pay $16 million.
In the past two decades, more than 200,000 people have died in the United States from overdoses involving prescription opioids, according to the Centers for Disease Control and Prevention.
This article originally appeared in The New York Times.