McKesson Opioid Trial Begins With $95 Billion Potentially at Stake
McKesson Opioid Trial Begins With $95 Billion Potentially at Stake
(Bloomberg) -- McKesson Corp. and two other drug distributors say they could end up having to pay more than $95 billion if they lose a trial in Seattle over the opioid crisis that began Monday.
Washington State Attorney General Robert Ferguson claims McKesson, Cardinal Health Inc. and AmerisourceBergen Corp. violated the state’s consumer-protection laws by turning a blind eye to red flags about opioid shipments. The companies failed to have tracking systems in place to prevent illegitimate sales and distribution of opioids as required by Washington’s state law, Ferguson said.
Evidence will show McKesson and the other distributors “displayed a callous disregard” for the state’s residents, Ferguson said in opening statements before state court Judge Michael Scott, who is hearing the case without a jury.
The state seeks at least $38 billion to replenish treatment and social-services budgets depleted by the public-health crisis. But the companies -- which deny any wrongdoing -- say the attorney general’s demand for penalties and forfeited profits could add up to more than $95 billion.
The companies’ lawyers told the judge that the distributors didn’t improperly swamp Washington state with the highly addictive painkillers, but filled legitimate orders medicines approved by the U.S. Food and Drug Administration.
“The heart of this case is whether the distributors acted unreasonably,” Enu Mainigi, a lawyer for Cardinal Health told Scott. “Cardinal Health does not drive the demand for opioids,” she said.
Read more: Rx, Heroin, Fentanyl -- How the Opioid Crisis Evolved: QuickTake
Drug distributors, manufacturers and retailers face more than 4,000 lawsuits from state and local governments over the opioid crisis that’s blamed for almost 500,000 deaths in the U.S. The governments accuse the companies of downplaying the painkiller’s addiction risks and sacrificing patient safety for billions in profits.
Ferguson pressed for a trial after rejecting a $26 billion settlement offer from the distributors and former opioid maker Johnson & Johnson. Washington was slated to get more than $527 million under the deal, but Ferguson said that would work out to about $30 million a year over the life of the agreement -- which he said wasn’t “nearly good enough.”
The trial in Seattle follows some recent wins for the pharma industry in the sprawling, four-year opioid litigation. A judge in California earlier this month threw out four municipalities’ claims that J&J, Teva Pharmaceutical Industries Ltd. and other opioid makers created a public nuisance by flooding the state with the painkillers.
Last week, the Oklahoma Supreme Court threw out a $465 million award to the state over what the Oklahoma Attorney General’s office alleged were misleading opioid marketing campaigns. City and county officials in West Virginia are awaiting a federal judge’s ruling in a public-nuisance case against McKesson, Cardinal Health and AmerisourceBergen.
A jury in federal court in Cleveland also began hearing closing arguments Monday in a public-nuisance suit against retailers including Walmart Inc. Walgreens Boots Alliance Inc. and CVS Health Corp. over allegations they failed to properly monitor opioid prescriptions they filled.
During opening statements in Seattle, AmerisourceBergen’s lawyers accused Ferguson of seeking to “rewrite history” with allegations the company should’ve stopped shipments to prevent illegitimate sales of drugs.
Patients with a real need for opioid-based painkillers “wouldn’t be able to get them” if the company had done that, Bob Nicholas, a lawyer for AmerisourceBergen told the judge.
The Washington case is State of Washington v. McKesson Corp., No. 9-2-06975-9, State of Washington, King County Superior Court (Seattle)
©2021 Bloomberg L.P.