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McKesson settles state lawsuit for allegedly turning a blind eye to suspicious opioid sales

Opioid crisis

McKesson, without admitting liability or wrongdoing, has settled litigation with West Virginia that accused it lax supply chain oversight when it came to its lucrative sales of opioids in the state. (Maria Fabrizio for KHN)

Drug distributor McKesson, which has had some serious opioid habits, has extricated itself from another piece of litigation tied to the nation’s addiction epidemic.   

The company on Friday agreed to pay $37 million over five years to settle a lawsuit with West Virginia which accused the distributor of falling short on investigating and reporting suspicious drug orders as required by law and so playing a major role in the state’s struggles with the highly addictive drugs.

It will pay $14.5 million up front and another $4.5 million a year for the next five years. The money will go toward the state’s “fight against drug abuse in West Virginia,” including rehab services and job training. The state, which has the highest rate of opioid overdoses in the country, accused the wholesaler of distributing enough hydrocodone and oxycodone to treat every legitimate patient in the state with nearly 3,000 doses, the New York Times reports.

McKesson, however, was allowed to settle the accusation without admitting any wrongdoing.

“The agreement does not include any admission of liability, and McKesson expressly denies wrongdoing,” the company said in a statement.

It pointed to its enhancements to protect the “integrity of the supply chain and preventing diversion,” and said it is working to end this national crisis.

Some of those enhancements came after pressure from the Justice Department. In 2017, the company agreed to pay $150 million in penalties, and to suspend sales of opioids in Colorado, Ohio, Michigan and Florida because of its violations of the Controlled Substances Act (CSA). The feds said at the time that McKesson agreed to certain improvements to its system, but more importantly, was required to hire “an independent monitor to assess compliance—the first independent monitor of its kind in a CSA civil penalty settlement.”

Then last year, one of the company’s facilities was issued a warning letter for failing to sufficiently investigate reports of tampering of bottles distributed by the plant that were supposed to contain opioids but instead contained over-the-counter naproxen. That failure led to a verbal lashing by the FDA Commissioner Scott Gottlieb who called McKesson’s lack of controls a violation of law and “simply unacceptable.”

All of the major distributors, as well as many of the makers of the pain killers, have settled or are facing similar accusations.