Gov. Jim Justice and the Attorney General’s Office announced a $37 million settlement with McKesson Corporation pushing the total paid in West Virginia’s pursuit of 13 pharmaceutical wholesalers to in excess of $84 million.
The $37 million settlement represents what is believed to be the largest state settlement of its kind in the nation against any single pharmaceutical distributor. Furthermore, the combined tally of $84 million stands as the largest pharmaceutical settlement in state history.
The McKesson settlement resolves allegations by the state related to the distribution of controlled substances to West Virginia licensed and U.S. Drug Enforcement Administration registered dispensers in the state. It does not resolve any allegations brought by counties, municipalities or other political subdivisions within West Virginia.
Attorney General Patrick Morrisey brought the lawsuit along with two departments in Gov. Justice’s administration: Health and Human Resources, and Military Affairs and Public Safety. The plaintiffs intend to use their portions of settlement funds to further the collective fight against drug abuse in West Virginia.
McKesson denies the allegations of plaintiffs’ complaint and any wrongdoing.
The settlements received approval from the Attorney General’s Office, Gov. Justice and secretaries of the Department of Health and Human Resources and Department of Military Affairs and Public Safety. All parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.
Previous settlements involved Cardinal Health ($20 million), AmerisourceBergen ($16 million), H.D. Smith ($3.5 million), Miami-Luken ($2.5 million), Anda Inc. ($1,865,250), The Harvard Drug Group ($1 million), Associated Pharmacies ($850,000), J.M. Smith Corporation ($400,000), KeySource Medical Inc. ($250,000), Quest Pharmaceuticals ($250,000), Top Rx ($200,000) and Masters Pharmaceutical LLC ($200,000).
Terms require McKesson to pay $14.5 million by within three business days of the case’s dismissal with five additional payments of $4.5 million each year through May 6, 2024.
Afterward, U.S. Senator Joe Manchin (D-WV) released the following statement on West Virginia Attorney General Patrick Morrisey and Governor Jim Justice’s “horrific and inadequate” settlement with McKesson Corporation for flooding West Virginia with opioids and killing thousands of West Virginians.
“It’s no surprise to me that Patrick Morrisey and Jim Justice have allowed this type of thievery and have cut a sweetheart deal with McKesson that sells out West Virginia out of the billions of dollars in damages that our state and our people have endured. This is exactly what I said would happen and is exactly what they denied they were going to settle for in October 2018. Then Chief Deputy AG Anthony Martin said: ‘Contrary to Manchin’s statements, we have received no offer and there has been no scheduling of a Friday press conference by our office. Anything said to the contrary is utterly dishonest…’
“To give a sense of how horrific this settlement is, when the State of Oklahoma settled with their opioid lawsuit, they received $270 million, nearly 10 times what our Governor and Attorney General agreed to take. Oklahoma’s rate of opioid-related deaths is 80% lower than West Virginia, but they got almost 10 TIMES MORE MONEY. When we settled our tobacco lawsuits when I was still in state government, we got $1.8 billion for the State of West Virginia. How in the world, do Justice and Morrisey think 1/10th of what Oklahoma got is a great deal? McKesson has shipped over 100 million opioid pills into West Virginia, and this epidemic has done $8.8 billion in damage annually. 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. Either way, they have failed our state.
“Last October, I called on Jim Justice to deny the settlement but it appears that he didn’t care enough to fight for the money that West Virginia deserves. I spoke out then and I’m speaking out now that it makes me sick that the very people that are supposed to protect West Virginians are letting a drug distributor screw us over. It makes me sick and I know it makes every West Virginian sick, especially those who have lost someone to this drug epidemic or knows someone who is struggling with drug addiction now. This disgraceful settlement is a shameful injustice to us all.
“In 2018, McKesson made $208.4 billion. How can Patrick Morrisey and Jim Justice look West Virginians in the eye and tell them $37 million is fair? It’s pennies on the dollar to what McKesson cost our state. Just like Morrisey and Justice know this is a sweetheart deal for McKesson, West Virginians know firsthand what this epidemic has cost our communities. I stand with them in their anger at this disgraceful settlement.”
Delegate Kayla Kessinger (R-Fayette) and Delegate Andrew Robinson (D-Kanawha) proceeded to send a letter to Attorney General Patrick Morrisey to request that his office direct funds from the $37 million settlement with McKesson Corporation to substance use treatment in West Virginia.
“I hope that the Attorney General will invest this money in substance use prevention and treatment efforts in our state,” Delegate Kessinger stated. “Communities in every part of the state are struggling to fight the effects of the drug epidemic, and they need the help that this funding can provide,” she continued.
“The Ryan Brown Addiction Prevention and Recovery Fund provides vital funding for recovery and treatment facilities across West Virginia,” Delegate Robinson stated. “The money from this settlement can and should be put to use in our communities – communities that have been devastated by the opioid epidemic that has been fueled by excessive, irresponsible shipments of prescription opioids by drug companies like McKesson Corporation.”