McKesson says AGs seek up to $21B from pharma distributors in opioid settlement

In a regulatory filing, McKesson (MCK) said that, under the framework proposed by state attorneys general over its alleged involvement in helping fuel the U.S. opioid crisis, the three largest U.S. pharmaceutical distributors could be expected to pay an aggregate amount of up to $21B over 18 years, with up to approximately $8B over 18 years expected from the company. The proposed framework would also require the three distributors, including the company, to adopt changes to anti-diversion programs. If the negotiating parties agree on the terms for a broad resolution, those potential terms would need to be agreed to by numerous other state and local governments before an agreement could be accepted by the company and finalized. Under the framework, before the distributors determine whether to enter into any final settlement, they would assess the sufficiency of the scope of settlement, based in part on the number and identities of the states, political subdivisions, and governmental entities that would participate in any such settlement. If states, political subdivisions or other governmental entities did not agree to a settlement under the framework, there would be a corresponding reduction in the amount due from the company to account for this. Discussions with attorneys general and other parties continue. To be viable, a broad settlement arrangement would require participation of numerous parties and the resolution of many complex issues. Because of the many uncertainties associated with any potential settlement arrangements, and the uncertainty of the scope of potential participation by plaintiffs, the company has not reached a point where settlement is probable, and as such has not recognized any liability related to any potential settlement framework as of September 30, 2020. The Fly notes that the other pharma distributors involved in such suits are McKesson rivals AmerisourceBergen (ABC) and Cardinal Health (CAH).