WHEELING – The minority vice chairman of the House of Delegates Judiciary Committee is criticizing last week’s $37 million state settlement with a drug company.
On May 2, Attorney General Patrick 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.
But Shawn Fluharty, a Democrat from Wheeling, says he thinks the settlement is “just another example of our state being taken advantage of by Big Pharma.”
He also was critical of Morrisey.
“When our own attorney general – the state’s chief legal officer – has to recuse himself in a fight against Big Pharma, well that says a lot,” Fluharty, who is an attorney with Harris Law Offices, told The West Virginia Record. “We’ve now had many separate settlements with drug manufacturers and distributors. But at no point has the attorney general or his office shown a desire to hold a trial where a jury of West Virginians determines the fate of these pharmaceutical companies.
“And now, he’s just kind of talking in circles. He says manufacturers and distributors aren’t the same. Yet, we settled with Cardinal Health, I believe. And they’re a manufacturer. …
“Spare me the notion that this distributor didn’t know what it was doing. I believe people of West Virginia should finally have a say. With all of these settlements, they haven’t had a say. We deserve a day in court.”
He said Morrisey is incentivizing the actions of these companies to continue dumping pills into West Virginia.
“What incentive does McKesson have to stop this practice?” Fluharty asked. “They don’t.
“I don’t think this is a situation where anybody in West Virginia – whether you’re the attorney general, a politician, a journalist or a citizen – should be celebrating victory.
“This is scruples. We’re used to getting scruples. Now, he’s attempting to claim victory on something he had to recuse himself from to begin with. Instead of asking people on Twitter how we should use the settlement money, he should be issuing an apology to the state of West Virginia.
“I think it’s a joke. I think it’s been a joke from the beginning. From the beginning, the fix was in. The joke was on us. It’s just ridiculous to me. We’re accepting it as some sort of victory.”
Morrisey spokesman Curtis Johnson dismissed criticism of the settlement.
“This is a record-setting settlement," Johnson told The Record. "Critics can dream, but the fact remains that no other state entity has received more from a single distributor for a case of this kind than the $37 million West Virginia will receive from McKesson.
“Furthermore, this settlement is the best opportunity West Virginia had, and again, it is no small amount of money."
Johnson said going to trial is a costly process with no guarantees.
"The armchair criticism of some ignores that McKesson would almost certainly appeal any sizable jury verdict from Boone County," he said. "This would delay any recovery for several years, potentially erase it all together and could be impacted by out of state litigation.
“It’s also disheartening to see how far people are willing to go to play politics with people who are dying from the opioid epidemic.
“No office has been more aggressive in fighting the pill epidemic, and through our office’s work, prescribing numbers are coming way down — more than 35 percent in recent years — due in part to our enforcement work, advancement of best practices and litigation.
“Shame on those who are doing virtually nothing to fight this problem who are attacking an office that is getting a lot of positive things done.
“While no amount of money can totally end the opioid crisis, we believe the $37 million will be put to good use to help the state reduce addiction and stop senseless death.”
Fluharty isn’t the first to criticize the settlement and Morrisey’s handling of it.
Last fall, when the Republican Morrisey was challenging incumbent Democrat Joe 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.
“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. According to the AG’s office, legal fees for outside counsel in this case are estimated at $4.85 million. That is 13.1 percent of the total damages obtained.
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.