McKesson, Drug Distribution Giant, Settles Lawsuit Over Opioids in West Virginia

The state of West Virginia on Wednesday settled a lawsuit against the nation’s largest drug distributor, which had been accused of shipping nearly 100 million doses of addictive opioids to residents over a six-year period.

The state’s suit accused McKesson Corporation 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, the sixth-largest American company in terms of revenue, reported over $208 billion in the last fiscal year. 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 on 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 of 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.

Sen. Joe Manchin, Democrat of West Virginia, disparaged the settlement as a “sweetheart deal” that “sells out” the state. “It’s pennies on the dollar to what McKesson cost our state,” Mr. 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 impact 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.

[Read more about the role of drug distributors in the opioid crisis.]

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 American companies by revenue.

McKesson has enhanced its monitoring of the distribution of controlled substances in recent years, Ms. 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 percent 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 on 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.