Summary
McKesson Corporation (MCK) has entered into an agreement to settle a lawsuit with the State of Connecticut concerning First DataBank's published drug reimbursement benchmarks, known as Average Wholesale Prices (AWPs). The settlement amount is $26 million, which will be shared between Connecticut and the Federal government. This settlement is expected to result in a pre-tax charge of $24 million to the company's second fiscal quarter, ending September 30, 2010, impacting litigation reserves. Importantly, McKesson explicitly denies any liability in connection with this settlement, maintaining its consistent position that it did not violate any laws regarding First DataBank's AWP publications. This filing is an "Other Events" disclosure (Item 8.01) and provides an update on a previously disclosed legal matter. Investors should note that the company has a history of disclosing such litigation in its periodic and annual reports.
Key Highlights
- 1McKesson to pay $26 million to settle lawsuit with the State of Connecticut regarding drug reimbursement benchmarks (AWPs).
- 2The settlement will result in a pre-tax charge of $24 million in the fiscal Q2 2010 financial results.
- 3McKesson expressly denies any liability or wrongdoing in connection with the AWP publication.
- 4The settlement amount will be shared between the State of Connecticut and the Federal government.
- 5This disclosure is an update to existing litigation previously detailed in SEC filings.
- 6The company reiterates its consistent stance that it has not violated any laws related to First DataBank's AWP publications.