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State leaders react to $37 million settlement with McKesson

CHARLESTON, W.Va. — Gov. Jim Justice said Thursday the $37 million settlement of the state’s opioid lawsuit against the pharmaceutical company McKesson was not enough for his liking but it’s probably the best option for the state.

Gov. Jim Justice

Justice said everyone that came to him said the settlement was the best the state could expect.

“I don’t think it’s enough. I know how wealthy this company is but at the same time, I’d rather take the money and get on what we need to be getting on with rather than just lose the money,” Justice told reporters Thursday at the state capitol.

An announcement from the state Attorney General’s Office suggested that’s the largest state settlement of its kind in the nation against any single pharmaceutical distributor.

McKesson Corporation is one of the nation’s largest distributors of pharmaceutical drugs. The company reported revenues of $208.4 billion in 2018.

Late last year, when Attorney General Patrick Morrisey was running for U.S. Senate, the possibility of a settlement with McKesson became a political issue.

Incumbent Senator Joe Manchin said a rumored settlement amount of $35 million would not be enough to help the state for one year of what the opioid epidemic costs. He called it “a mugging in broad daylight.”

Joe Manchin

Today, Manchin issued a statement labeled “Sweetheart settlement with McKesson sells out West Virginia.” He called it “horrific and inadequate.”

“How can Patrick Morrisey and Jim Justice look West Virginians in the eye and tell them $37 million is fair?” Manchin stated today. “It’s pennies on the dollar to what McKesson cost our state.”

Morrisey’s press secretary Curtis Jackson criticized Manchin’s comments in a statement released Thursday afternoon.

“Joe Manchin has no credibility to criticize any measures the state takes to clean up from the cataclysmic wake he left by driving West Virginia into the height of the opioid crisis while he was governor. While Attorney General Morrisey and subsequent governors have fought to realize historic recoveries from drug distributors, it seems Manchin’s most significant impact in the opioid epidemic was the record breaking numbers of pills he allowed to proliferate throughout the state during his watch. It is the height of political hypocrisy for him to now criticize the state’s efforts to pick up the pieces from when he was asleep at the switch.”

Patrick Morrisey

The estimated annual cost for West Virginia to deal with the opioid crisis is $8.8 billion a year, according to an analysis by a researcher at the American Enterprise Institute.

State officials noted that this announcement pushes the total paid in West Virginia’s pursuit of 13 pharmaceutical wholesalers to in excess of $84 million.

Together, that’s the largest pharmaceutical settlement in state history, state officials again suggested.

“I am grateful to our team, which under my watch has done as much or more than any office in the country to fight this terrible epidemic, fix the failed policies of the past and bring accountability to the system,” Morrisey said. ““Since our team came into office, the number of pills coming into West Virginia has decreased by 35 percent, down significantly from the record-breaking amount of pill proliferation during the asleep-at-the-switch Manchin administration.”

Justice administration Chief Counsel Brian Abraham said it’s important to point out McKesson is a distributor not a manufacturer of the drugs like Purdue Pharma which settled recently with the state of Oklahoma for $250 million.

Abaraham said Morrisey hired a talented legal team that determined a settlement was better than going to trial against McKesson.

“Anybody that doesn’t have to take that case into court and try it really shouldn’t be criticizing the outcome,” Abraham said. “There’s a lot of things proving causation and proving damages were the obstacles they were finding.”

Brian Abraham

Abraham said he’s confident the right decision was made.

“You hire a good lawyer and you should listen to them,” he said.

Justice said at the end of the day “you’ve gotta listen to the experts.”

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).

The McKesson settlement resolves allegations over 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 separate allegations brought by counties, municipalities or other political subdivisions within West Virginia.

Morrisey brought the lawsuit along with two agencies in the Justice administration: Health and Human Resources, and Military Affairs and Public Safety. All three approved the settlement.

The plaintiffs intend to use their portions of settlement funds for the fight against drug abuse in West Virginia, although no specifics were offered immediately.

The announcement noted that all parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.

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.

McKesson denies the allegations of plaintiffs’ complaint and any wrongdoing.

McKesson two years ago agreed to pay $150 million federal civil penalty for alleged violations of the Controlled Substances Act.

MetroNews reporter Jeff Jenkins contributed to this story. 

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