Since the early days of the coronavirus pandemic, President Donald Trump’s administration has been heaping praise and awarding contracts to prescription drug distributors that are being accused of fueling the opioid crisis.
Last month, the president tapped McKesson Corp. as the nationwide distributor for a potential COVID-19 vaccine. In late March, Trump called McKesson a “great company” during a White House press conference that included the CEOs of McKesson and another wholesale drug distributor, Cardinal Health.
Soon after, the Trump administration selected drug distribution giant AmerisourceBergen for a federal contract that gives the company exclusive rights to deliver remdesivir (which the U.S. Food and Drug Administration approved in April as an emergency treatment for seriously ill patients) and hydroxychloroquine (which the FDA revoked emergency approval for and warned of cardiac side effects with the drug).
Those same companies — known in the industry as the “Big Three” — are being sued by more than 3,000 cities, counties and states across America. The lawsuits allege the distributors flooded the country with prescription painkillers amid a surge in opioid-related overdose deaths.
In West Virginia, the Cabell County Commission and the City of Huntington are next in line to take their lawsuits against McKesson, AmerisourceBergen and Cardinal Health to trial.
U.S. District Judge David Faber has scheduled a bench trial — Faber will decide the case instead of a jury — for Oct. 19.
“The people of West Virginia have waited three years for this reckoning,” said Paul Farrell, a lawyer who’s representing Cabell County. “We look forward to the transparency that a public trial will bring.”
Faber also has ordered the two sides to resume settlement talks. Such a deal could set the stage for a national settlement that’s expected to be in the tens of billions of dollars.
For more than a decade, West Virginia has had the highest drug overdose death rate in the nation. The oversupply of opioid pain medications — triggered by doctors writing too many prescriptions — is widely believed to have started the opioid epidemic and led to a record number of fatal overdoses.
The pandemic has made the addiction crisis that much worse in West Virginia. In May and June, emergency medical crews responded to more than 1,900 suspected drug overdoses compared to 1,200 those months in 2019.
McKesson, AmerisourceBergen and Cardinal Health are some of the largest corporations in America. McKesson ranks No. 8 in the Fortune 500 list, AmerisourceBergen is No. 10, and Cardinal is No. 37.
Three years ago, a congressional committee started investigating those distributors and others. In a scathing report, a U.S. House committee blasted drug distributors for “pill dumping.” The panel also sharply criticized the DEA for turning a blind eye to the massive opioid shipments.
Amid the investigation, federal lawmakers summoned the companies’ top executives to Capitol Hill to testify. The executives denied that their firms played any role in fueling the opioid crisis.
The congressional committee raised numerous questions about McKesson’s sales practices in West Virginia. In 2005 and 2006, for instance, McKesson shipped nearly 5 million doses of prescription painkillers to a now-shuttered Sav-Rite Pharmacy in Kermit, a town in Mingo County with 400 people, the committee said in a letter to the company. McKesson stopped shipping prescription opioids to Sav-Rite between 2008 and 2010, but resumed shipments of powerful painkillers a year later, even after federal authorities raided the drugstore, according to the committee.
Between 2006 and 2014, McKesson also shipped a total of 5.8 million hydrocodone and oxycodone pills to a small pharmacy in Mount Gay, population 1,800, according to the committee.
In addition to McKesson, the congressional panel sharply criticized Cardinal Health and AmerisourceBergen for systemic “failures that contributed to the worsening of the opioid epidemic” by sending an “inordinate” number of prescription painkillers to the state. McKesson, AmerisourceBergen and Cardinal Health alone combined to ship more than 900 million hydrocodone and oxycodone pills between 2005 and 2016. Thousands of West Virginians fatally overdosed after taking those prescription opioids during that time.
McKesson did not respond to a request for comment. An AmerisourceBergen spokesman described the company’s pandemic response as “inspiring,” and declined to comment on the lawsuits. A Cardinal Health spokesman said, “We continue to work toward a settlement that would bring substantial and immediate relief to communities impacted by the opioid epidemic. However, if a settlement agreement cannot be reached, we are more than prepared to go to trial.”
Earlier this week, the wholesale drug distributors asked Faber to dismiss the lawsuit, arguing that Cabell County and Huntington haven’t stated “a valid public nuisance claim under West Virginia law.”
During a March conference call with investment bankers, AmerisourceBergen CEO Stephen Collis suggested that the distributor was using its critical role in the pandemic as leverage in settlement talks, according to a report by The Intercept.
“I would say that this crisis, the coronavirus crises, actually highlights a lot of what we’ve been saying, how important it is for us to be very strong financial companies and to have strong cash flow ability to invest in our business and to continue to grow our business and our relationship with our customers,” Collis said at the time.
During the same call, an investment banker said that a“silver lining” of COVID-19 would be that Cardinal Health might receive fewer questions about the lawsuits that blame the company for the opioid epidemic, The Intercept reported.
“We’re not afraid to go to court,” Cardinal CEO Michael Kaufman said in response. “We’d prefer to get this done and put it behind us, but not to the extent of having to make a deal that doesn’t make any sense.”
The following month, the Justice Department gave McKesson and Cardinal Health the green light to collaborate on their response to the coronavirus pandemic without having to face antitrust scrutiny. Weeks later, the department gave AmerisourceBergen the same clearance to distribute hydroxychloroquine with its competitors.
Trump has touted the anti-malaria drug as a treatment for COVID-19, but researchers and organizations like the American Heart Association say it can make heart problems worse — and there’s no evidence that it’s effective against coronavirus.
In May, doctors and hospitals criticized the Trump administration for mishandling the initial distribution of remdesivir, according to the Washington Post and Politico. The COVID-19 drug was delivered to some hospitals that didn’t need it.
In mid-August, McKesson was selected as the national distributor for potential coronavirus vaccines, after the Centers for Disease Control and Prevention exercised an option on a 2016 contract with the company. That contract was for the CDC’s Vaccines for Children Program, but includes a provision to expand the program in response to a pandemic, the CDC said.
Trump has suggested that a vaccine could arrive by Election Day, Nov. 3. Most health experts say a safe and effective vaccine won’t be publicly available until sometime next year.