Last week, McKesson Corp. and West Virginia Attorney General Patrick Morrisey announced McKesson would pay the state $37 million as a settlement in a lawsuit Morrisey's office had filed. The lawsuit accused McKesson of failing to appropriately monitor its distribution of painkillers to pharmacies throughout the state. In the settlement, McKesson denied any wrongdoing.
Soon after the settlement was announced, people began questioning whether the state was receiving enough, considering the suffering the opioid epidemic has caused. Sen. Joe Manchin, D-W.Va., who defeated Morrisey in Manchin's re-election bid last fall, noted that Oklahoma had received a $270 million settlement from Purdue Pharma earlier this year. Oklahoma's settlement came out to about $69 per person in that state, while West Virginia will receive only about $20 to $21 per person from McKesson.
McKesson isn't the only alleged villain in this epidemic, so it should not be expected to pay the full costs of the damage the people of West Virginia have suffered. But it cannot be denied that McKesson and other companies are getting off easy for the roles they played - too easy. They should have detected something wrong in the extremely high number of pills they were shipping into a state as lightly populated as West Virginia - but didn't.
How many pills?
In 2005 and 2006, for example, McKesson shipped nearly five million doses of prescription painkillers to a now-closed pharmacy in Kermit, a town in Mingo County with 400 people, according to a letter sent to the company as part of a 2018 congressional committee investigation into drug distributors.
Between 2006 and 2014, McKesson shipped 5.8 million hydrocodone and oxycodone pills to a pharmacy in Mount Gay, population 1,800. The company supplied another 2.3 million prescription painkillers to the Logan County drugstore's branch location in Stollings, just three miles away.
The settlement with McKesson only concerns the lawsuit and allegations brought against the company by the state, and is completely unrelated to ongoing litigation brought by counties and municipalities throughout West Virginia and in other states. Thus, more settlements are likely to come, assuming the company does not decide it has paid enough and makes the smaller units of government pay the costs of protracted trials that could produce nothing.
According to the terms in the settlement announced by Morrisey, McKesson must pay $14.5 million within three business days of the case's dismissal, then make annual payments of $4.5 million until May 6, 2024. The funds collected will be used to "further the collective fight against drug abuse" in the state, however no specifics were available as to how.
Specifics of how the settlement money will be spent should be announced soon so the public knows what it is getting from a settlement that seems too small. At least the money has been designated for use fighting the problems drug abuse causes. Morrisey's predecessor was allowed to use lawsuit settlements as a personal slush fund. He doled out money to whomever he wanted, even if the recipients did not have a direct connection to the case that had been settled.
In the final analysis, Morrisey or people in his office had to weigh the costs of continuing the court battle against McKesson and risking a loss versus taking a smaller amount now. A settlement was wise, but this one was too small. His job as attorney general is to negotiate the best deal for the state. In this case, he fell short.