Manchin criticizes state's 'sweetheart' $37 million settlement with McKesson

By Chris Dickerson | May 3, 2019

CHARLESTON – U.S. Senator Joe Manchin and West Virginia Attorney General Patrick Morrisey again are having a war of words regarding a state settlement with a drug company.

On May 2, Morrisey and Gov. Jim Justice announced a $37 million settlement with McKesson Corporation. That settlement, which Morrisey's office says is believed to be the largest state settlement of its kind against a single pharmaceutical distributor, pushes the total paid in West Virginia’s pursuit of 13 pharmaceutical wholesalers to more than $84 million.

Last fall, when the Republican Morrisey was challenging incumbent Democrat Manchin for the U.S. Senate seat, Manchin said a then-rumored $35 million settlement with McKesson wasn’t good enough.

“For the sake of the State of West Virginia please don’t do this deal,” Manchin said during an Oct. 23 appearance on MetroNews’ “Talkline” radio program with host Hoppy Kercheval. “We can’t pick up all this cost, and, if we pick up all this costs, we’re going to be basically detrimental to all of the other services that people are depending on.

“Gov. Justice, please, I’m imploring you. I’ve set in your seat before. I know the power you have. Please, jump in and stop this horrible, horrible settlement for the people of West Virginia because it’s going to affect us for a long time.”

After the May 2 settlement was announced, Manchin issued a statement calling the deal “a sweetheart settlement with McKesson” that “sells out West Virginia. He also called the deal “horrific and inadequate.”

“It’s no surprise to me that Patrick Morrisey and Jim Justice have allowed this type of thievery and have cut a sweetheart deal with McKesson that sells out West Virginia out of the billions of dollars in damages that our state and our people have endured,” Manchin said. “This is exactly what I said would happen and is exactly what they denied they were going to settle for in October 2018.

“Then Chief Deputy AG Anthony Martin said: ‘Contrary to Manchin’s statements, we have received no offer and there has been no scheduling of a Friday press conference by our office. Anything said to the contrary is utterly dishonest…’

“To give a sense of how horrific this settlement is, when the State of Oklahoma settled with their opioid lawsuit, they received $270 million, nearly 10 times what our Governor and Attorney General agreed to take. Oklahoma’s rate of opioid-related deaths is 80 percent lower than West Virginia, but they got almost 10 times more money.”

Manchin said when he was governor, the state settled tobacco lawsuits for $1.8 billion.

“How in the world, do Justice and Morrisey think 1/10th of what Oklahoma got is a great deal?” Manchin said. “McKesson has shipped over 100 million opioid pills into West Virginia, and this epidemic has done $8.8 billion in damage annually. The Governor and Attorney General either don’t know how to negotiate, don’t understand the scope of this problem or don’t care about the impact this epidemic has had on the state of West Virginia. Either way, they have failed our state.”

Manchin said the state got a raw deal.

“Last October, I called on Jim Justice to deny the settlement but it appears that he didn’t care enough to fight for the money that West Virginia deserves,” he said. “I spoke out then and I’m speaking out now that it makes me sick that the very people that are supposed to protect West Virginians are letting a drug distributor screw us over.

“It makes me sick and I know it makes every West Virginian sick, especially those who have lost someone to this drug epidemic or knows someone who is struggling with drug addiction now. This disgraceful settlement is a shameful injustice to us all.”

Manchin noted that McKeson made $208.4 billion in 2018.

“How can Patrick Morrisey and Jim Justice look West Virginians in the eye and tell them $37 million is fair?” Manchin said. “It’s pennies on the dollar to what McKesson cost our state. Just like Morrisey and Justice know this is a sweetheart deal for McKesson, West Virginians know firsthand what this epidemic has cost our communities. I stand with them in their anger at this disgraceful settlement.”

Morrisey spokesman Curtis Johnson lashed back at Manchin’s comments.

“Joe Manchin has no credibility to criticize any measures the state takes to clean up from the cataclysmic wake he left by driving West Virginia into the height of the opioid crisis while he was governor,” Johnson said. “While Attorney General Morrisey and subsequent governors have fought to realize historic recoveries from drug distributors, it seems Manchin’s most significant impact in the opioid epidemic was the record breaking numbers of pills he allowed to proliferate throughout the state during his watch.

“It is the height of political hypocrisy for him to now criticize the state’s efforts to pick up the pieces from when he was asleep at the switch.”

Morrisey praised the work of his office and attacked Manchin.

“I am grateful to our team, which under my watch has done as much or more than any office in the country to fight this terrible epidemic, fix the failed policies of the past and bring accountability to the system,” he said. “Aside from the $84 million recovered from pill distributors, our lawsuit against the DEA brought sweeping reform to the nation's drug quota system and is helping to dramatically reduce the volume of pills in our state.

“Since our team came into office, the number of pills coming into West Virginia has decreased by 35 percent, down significantly from the record-breaking amount of pill proliferation during the asleep-at-the-switch Manchin administration.”

Charleston attorney L. Lee Javins of Bailey, Javins & Carter led the AG's outside counsel team on the case.

Morrisey's office says the McKesson settlement resolves allegations by the state related to the distribution of controlled substances to West Virginia licensed and U.S. Drug Enforcement Administration registered dispensers in the state. It also notes that this settlement does not resolve any allegations brought by counties, municipalities or other political subdivisions within West Virginia.

Morrisey brought the lawsuit along with two departments in Gov. Justice’s administration – Health and Human Resources, and Military Affairs and Public Safety. The plaintiffs intend to use their portions of settlement funds to further the collective fight against drug abuse in West Virginia.

McKesson denies the allegations of plaintiffs’ complaint and any wrongdoing.

“McKesson is committed to working with others to end this national crisis ... and is pleased that the settlement provides funding toward initiatives intended to address the opioid epidemic,” the company said in a statement.

The settlements received approval from the AG's office, the governor and secretaries of the DHHR and DMAPS. All parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.

The terms of the settlement require McKesson to pay $14.5 million by within three business days of the case’s dismissal with five additional payments of $4.5 million each year through May 6, 2024.

The AG's office listed previous settlements as well. Those include Cardinal Health ($20 million), AmerisourceBergen ($16 million), H.D. Smith ($3.5 million), Miami-Luken ($2.5 million), Anda Inc. ($1,865,250), The Harvard Drug Group ($1 million), Associated Pharmacies ($850,000), J.M. Smith Corporation ($400,000), KeySource Medical Inc. ($250,000), Quest Pharmaceuticals ($250,000), Top Rx ($200,000) and Masters Pharmaceutical LLC ($200,000).

The national opioid epidemic has prompted lawsuits by state, county and municipal governments accusing drug manufacturers of deceptively marketing opioids and distributors of failing to detect the diversion of the drugs for illicit purposes.

In 2017, McKesson agreed to pay $150 million to resolve a federal investigation by the U.S. Drug Enforcement Administration about its failure to report suspicious orders of addictive painkillers.

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Mckesson Corporation State of West Virginia U.S. Senator Joe Manchin West Virginia Attorney General West Virginia Governor's Office

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