Summary
McKesson Corporation (MCK) has announced a significant development regarding its opioid-related litigation. On February 25, 2022, the company, along with two other major pharmaceutical distributors, finalized an agreement to settle a substantial majority of opioid lawsuits filed by U.S. states, territories, and local governmental entities. This settlement, set to become effective on April 2, 2022, represents a move towards resolving a long-standing legal overhang for the company. The total settlement amount is up to approximately $19.5 billion, to be paid over 18 years. McKesson's portion is estimated at $7.4 billion, reflecting its 38.1% share. A key aspect of the settlement is that a minimum of 85% of these funds must be allocated by governmental entities towards remediating the opioid epidemic, with the remainder largely covering attorneys' fees and costs. The agreement includes the establishment of a clearinghouse to track controlled-substance distribution data, aiding in anti-diversion efforts. Importantly, the settlement does not involve an admission of liability or wrongdoing by the distributors.
Key Highlights
- 1McKesson to pay up to $7.4 billion over 18 years as part of a $19.5 billion opioid litigation settlement.
- 2Settlement covers a substantial majority of opioid-related lawsuits from U.S. states, territories, and local governments.
- 3The settlement agreement is set to become effective on April 2, 2022, contingent on court approvals.
- 4A minimum of 85% of settlement payments must be used for opioid epidemic remediation efforts.
- 5Distributors will establish a controlled-substance distribution data clearinghouse to support anti-diversion initiatives.
- 6The settlement resolves a significant legal uncertainty for McKesson, with no admission of liability or wrongdoing.
- 746 out of 49 eligible states, plus D.C. and all eligible territories, have joined the settlement.