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McKesson could pay $8B to settle opioid lawsuits

By Brian Buntz | November 4, 2020

Medical supply firm McKesson (NYSE:MCK) announced in a quarterly report that it and two other drug distributors could pay as much as $21 billion in opioid lawsuit settlements over 18 years.

Under the new proposal, McKessons’s share of the settlements could be $8 billion. Rivals AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) would pay the remainder to settle some 3,200 lawsuits.

The company’s stock, however, ticked up 5.25% to $160.01 late yesterday based on the company’s role in distributing COVID-19 vaccine kits. McKesson has struck a deal with the U.S. Department of Health and Human Services to enable a mass vaccination effort. McKesson will also serve as a distributor for COVID-19 vaccines in a contract with the U.S. Centers for Disease Control and Prevention.

In terms of the proposed opioid resolution, the $8 billion amount would be an increase over a prior proposal that would have had McKesson pay $6.68 billion over 18 years.

The details of the proposal could change in further negotiations. McKesson said it “has not reached a point where settlement is probable,” according to Reuters.

In related news, the U.S. Department of Justice announced a roughly $8 billion resolution with Purdue Pharma for its role in the U.S. opioid crisis. The company has filed for bankruptcy protection.

Earlier this month, opioid manufacturer Mallinckrodt (OTCMKTS:MNKKQ) also filed for bankruptcy after entering into an agreement in principle on a $1.6 billion opioid settlement.

Johnson & Johnson (NYSE: JNJ) also agreed to pay $5 billion in an opioid resolution, an increase of $1 billion over a prior proposal.

About The Author

Brian Buntz

The pharma and biotech editor of WTWH Media, Brian is a veteran journalist with more than 15 years of experience covering an array of life science topics, including clinical trials, drug discovery and development and medical devices. Before coming to WTWH, he served as content director focused on connected devices at Informa. In addition, Brian covered the medical device sector for 10 years at UBM. At Qmed, he overhauled the brand’s news coverage and helped to grow the site’s traffic volume dramatically. He had previously held managing editor roles on two of the company’s medical device technology publications. Connect with him on LinkedIn or email at bbuntz@wtwhmedia.com.

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