Summary
McKesson Corporation (MCK) filed an 8-K on November 12, 2004, to disclose the resolution of an industry-wide investigation concerning the marketing, sale, and reimbursement of enteral products. The company's indirect subsidiary, TBC Products, Inc., will plead guilty to attempting to obstruct a federal audit and will pay a total of $7.4 million in fines and civil settlement. Additionally, McKesson Medical-Surgical Minnesota Inc. will enter into a five-year Corporate Integrity Agreement with the Office of the Inspector General (OIG) of the Department of Health and Human Services. While this resolution involves a guilty plea and financial penalties, McKesson has stated that the $7.4 million payment was fully reserved in the second fiscal quarter. The company asserts that this resolution will have no material impact on its financial position, results of operations, or cash flows, nor is it expected to affect ongoing business relationships, including those with the federal government. The resolution effectively closes this matter for all McKesson entities.
Key Highlights
- 1McKesson has resolved an industry-wide investigation related to enteral products with the Department of Justice and the OIG.
- 2An indirect subsidiary, TBC Products, Inc., will plead guilty to obstruction of a federal audit.
- 3The company will pay a total of $7.4 million in fines and civil settlement.
- 4A subsidiary, McKesson Medical-Surgical Minnesota Inc., will enter into a five-year Corporate Integrity Agreement with the OIG.
- 5McKesson states the $7.4 million payment was fully reserved in the second fiscal quarter.
- 6The company expects no material impact on its financial position, results of operations, or cash flows.
- 7The resolution is not expected to affect ongoing business relationships, including with the federal government.