The federal government has recently settled several multi-million-dollar cases with opioid makers and distributors. The government has recovered nearly $300 million in damages. That may seem like a significant number, but it’s a very small drop in the bucket considering the heavy personal costs of the opioid crisis, which has killed more than 200,000 people from 2000-2016. Every day, 52 Americans die from opioid painkiller overdoses, according to the CDC. In purely financial terms, the crisis created by drug companies like McKesson has cost county and state governments billions of dollars.
Many other opioid lawsuits have since been filed by states’ attorneys general, and many more cases are expected to reach settlements, but here is a tally of recent settlements.
Lawsuit Settlements with Opioid Distributors & Makers
2017 – McKesson Corporation, the nation’s largest drug distributor, paid $150 million in a civil penalty for violating the Controlled Substances Act. McKesson had failed to report “suspicious orders” for oxycodone and hydrocodone, such as those suspicious in frequency, size, or other patterns. Government investigators wanted a $1 billion fine as well as criminal charges brought against McKesson. They got only the small million fine and no charges. The Washington Post reported that one DEA agent said, “We feel like our system was hijacked.” It was hijacked, twice, first by McKesson and and then by the nominal fine. The Justice Dept. boasts it as a “record settlement“; but it is inarguably paltry, given the real damages, and the fact that it was the company’s second offense.*
Were the three strike rule in effect for corporations (which the Supreme Court ruled in the infamous Citizen’s United are people), as it is for comparatively tiny drug pushing offenders, the company would be put in jail for life upon its next transgression.
2017 – Mallinckrodt Plc, an oxycodone maker, agreed to pay $35 million to resolve U.S. investigations into its monitoring and reporting of suspicious orders of controlled substances. (Reuters has the story.)
2017 – Costco Wholesale agreed to pay $11.75 million to resolve allegations that its pharmacies violated the Controlled Substances Act. Costco improperly filled prescriptions for controlled substances. (See Justice Department Costco)
2017 – Cardinal Health reached a $20 million settlement with the state of West Virginia regarding the distribution of opioids between 2007 and 2012. In one six-year period, Cardinal and other wholesalers sent 780 million hydrocodone and oxycodone pills to West Virginia. That’s 433 per state resident. That time period saw 1,728 fatal overdoses from opioids in the state. Columbus Business First has that story.
2016 – Cardinal Health, Inc. agreed to pay the U.S. $44 million to resolve allegations that it violated the Controlled Substances Act in Maryland, Florida and New York. Cardinal Health failed to report suspicious orders of controlled substances to pharmacies in those states. The Washington Post has that story.
2015 – Purdue Pharma, the maker of OxyContin, agreed to pay Kentucky $24 million to settle a lawsuit that accused Purdue of misleading the public about the addictiveness of the prescription opioid. CBS News has that story.
*2007/2008 – McKesson was fined $13.3 million by the Justice Dept. for mishandling prescription medicines, in a crime similar to its mishandling of opioids in its 2017 settlement. (See the Justice Dept. announcement.)
McKesson vowed to do better, but failed. Five months after the 2008 settlement, the board’s audit committee was notified of “serious deficiencies” in its system to spot suspicious opioid shipments, according to the Washington Post. McKesson’s internal auditors claimed that some customers hadn’t yet been assigned thresholds for large orders that would trigger a review, and there was insufficient documentation to back up decisions to alter such limits for existing customers. It’s a typical corporate ploy, to claim the left hand doesn’t know what the right hand is doing. But the sheer number of opiod orders, as in West Virginia (above) and elsewhere, renders that defense absurd. Failure to follow through on promises included in the 2008 fine was largely what led to McKesson’s being fined again in 2017, for the paltry sum of $150 million.