050319 McKesson

John Hammergren, chairman, president, and CEO, McKesson Corporation, testifies during a hearing of the Committee on Energy and Commerce, Subcommittee on Oversight and Investigations, about combating the opioid epidemic, on Capitol Hill May 8, 2018 in Washington. A $37 million settlement reached between the state of West Virginia and McKesson Corp. regarding opioid distribution in West Virginia contains no provisions that would prevent another prescription drug crisis from happening in the state. (AP Photo/Alex Brandon)

CHARLESTON – A $37 million settlement reached between the state of West Virginia and McKesson Corp. regarding opioid distribution in West Virginia contains no provisions that would prevent another prescription drug crisis from happening in the state.

"Any payment in any lawsuit about opioids — all of them, at best, will partially help repair damage already done," said Keith Humphreys, a West Virginia native and Stanford University professor who has advised both President Barack Obama and President George W. Bush on drug policy. "To me, the real critical thing is can you prevent damage in the future?'"

West Virginia Attorney General Patrick Morrisey announced the settlement Thursday. West Virginia will receive $37 million over several payments until 2024. Among other things, the money will go to prevention programs focused on children who've been through traumatic experiences, workforce development, drug rehabilitation and vocational training for inmates, and a program for grandparents raising children of addicted parents, according to a copy of the settlement.

Morrisey; Jeff Sandy, secretary of the West Virginia Department of Military Affairs and Public Safety; and Bill J. Crouch, secretary of the West Virginia Department of Health and Human Resources, were plaintiffs in the lawsuit, filed in Boone County Circuit Court in January 2016.

Thursday, a health law and criminal law professor as well as a drug policy expert, said they were most interested in whether the settlement included restrictions on future behavior by McKesson.

West Virginia state officials had argued that McKesson, which denies wrongdoing, had been negligent in monitoring pain pill distribution, causing injury to West Virginia resulting from addiction to prescription painkillers.

Humphreys, professor of psychiatry and an addiction researcher at Stanford, said the amount was larger than similar cases, and noted that West Virginia is a small state. 

But he noted that due to another litigation against tobacco companies years ago, those companies had to follow new advertising requirements.

"This money will be spent, and I'm sure it will be spent to help people; that's great," he said. "But if a month from now, McKesson makes a big suspicious shipment to Kermit, are they going to just do it and walk away?"

In 10 months, McKesson, the sixth-largest company in America, sent more than 3 million prescription opioids — nearly 10,000 pills a day on average — to a single pharmacy in Kermit, a town of 400, according to a congressional report cited by the Charleston Gazette-Mail.

Humphreys noted McKesson paid $150 million in 2017 in a settlement that involved several states. That case also set requirements on the company's future behavior.

According to a news release from the United States Department of Justice, the 2017 settlement involving multiple states required McKesson to submit to periodic auditing, stipulated financial penalties for failing to do so, required independent monitoring, and required McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years.

The only mention of future behavior by McKesson in the West Virginia settlement is a provision that states it will continue its drug diversion program that it is already operating, and that if McKesson sends the West Virginia Board of Pharmacy a suspicious order report, it doesn't object to the Board of Pharmacy sending those notifications to the West Virginia State Police and the West Virginia attorney general.

"Certainly it's not a lot of money to McKesson," Humphreys said. "They're going to be fine. I'm also happy West Virginia gets resources, of course, but to me the real cookie in these kind of cases is change in future conduct. If it's just a matter of writing a check and going on and doing exactly what you're doing, that just means we're going to have more suffering and in five years we're going to sue them and again they'll write another check."

Amanda Pustilnik, a professor of health and criminal law at the University of Maryland School of Law, and director of the Pain Project at the Center for Law, Brain and Behavior and Massachusetts General Hospital, has also been following similar cases.

"In the beginning of the opioid crisis, some jurisdictions from Massachusetts all the way west to West Virginia and beyond settled with some opioid manufacturers and distributers for relatively small amounts of money," she said, "but I think this is emblematic of a trend for larger settlements as we have come to understand both how significant the opioid epidemic is and what an active role the manufacturers and distributors played in causing and promoting it."

Previous settlements in West Virginia, according to Morrisey's news release, involved 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).

Pustilnik said that it would be common for the company to deny wrongdoing.

But she also said in other cases, it's common for companies to agree to specific future action, including a supervisory period. 

She also noted that a drug diversion program wouldn't prevent people from becoming addicted who get their drugs legally.

"If I were looking to see an appropriate correction action here, if I were prosecutor, i would probably want to work with McKesson and other manufacturers and distributors to develop criteria to identify the kind of suspicious activity that leads to flooding the market with prescriptions and then impose on them a duty to timely report that information so that it can be investigated by law enforcement," she said.

One provision of the settlement states: "McKesson has no objection, and, to the extent deemed necessary, fully authorizes the West Virginia Board of Pharmacy to provide copies of any suspicious order reports received by it from McKesson to the West Virginia State Police and the West Virginia Attorney General."

"That doesn't sound very powerful," Pustilnik said.

"Having to pay a large judgment does provide some deterrent value for future wrongdoing," she added. "This is not that large of a settlement that it would fundamentally change corporate behavior, although perhaps in the aggregate across the country it's starting to be big enough to make an impact.

"But given how hard hit West Virginia was by the opioid epidemic — stemming directly from wrongdoing by manufacturers and distributors who targeted West Virginia on purpose because it has high-vulnerability population and relatively low medical infrastructure — I think the amounts they should be paying out should be many times greater."

West Virginia has had the highest drug overdose death rate in the nation since 2010. According to a lawsuit West Virginia hospitals filed against opioid manufacturers earlier this week, between 2001 and 2015, 7,209 people died from overdoses in West Virginia. Most of those deaths involved an opioid. 

Many municipalities as well as hospitals in West Virginia have also sued opioid manufacturers. Those cases are still ongoing.

Prior to the November election, when U.S. Sen. Joe Manchin and Attorney General Morrisey were running against each other for Manchin's seat in Congress, Manchin had held a press conference, saying he had heard Morrisey planned a $35 million settlement with McKesson. He had objected to the amount, saying it was too low.

Manchin released a statement Thursday, calling the settlement a "sweetheart deal" and noting McKesson made $208.4 billion in 2018.

Morrisey responded that he was proud of his team's work and that there was a "record-breaking amount of pill proliferation during the asleep-at-the-switch Manchin administration."

Email: ebeck@register-herald.com and follow on Twitter @3littleredbones

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