McKesson expects opioid-related legal costs to exceed $100 million this year
McKesson Corp. expects to shell out more than $100 million in legal costs stemming from opioid lawsuits this year, its executives said on their third quarter earnings call Thursday.
The wholesale drug distributor, one of the country's largest, is one of several distributors facing lawsuits from a number of municipalities that argue it overlooked high volumes of prescriptions that should have been flagged as suspicious.
Brian Tyler, the company's chief operating officer and incoming CEO effective April 1, said the actual magnitude of the lawsuits will depend on judges' decisions and is out of the company's control.
"We take our fiduciary responsibility to our shareholders seriously," he said.
McKesson drew nearly $3 billion in gross profit in the third quarter of its fiscal 2019, which ended Dec. 31, 2018, up 9% from $2.7 billion in the prior-year period. The company generated $56.2 billion in revenue during the quarter, up 5% year-over-year.
Tyler downplayed McKesson's role in the opioid crisis, noting that McKesson delivers the products to Drug Enforcement Agency-licensed pharmacies, who fill prescriptions written by licensed physicians. The DEA even controls the quantity of opioids that are dispensed, he said.
"While we have a role in that physical supply chain, we feel like a disproportionate amount of attention has been placed on wholesalers to this point," Tyler said.
Fellow drug distributor AmerisourceBergen held a similar position on its own earnings call Thursday morning, when CEO Steven Collis said the company gets the drugs from FDA-approved drugs from pharmaceutical manufacturers to DEA- and state-registered pharmacies and dispenses them based on prescriptions from licensed healthcare providers.
"Notably, we do not have access to patient information and we are not qualified to interfere with the very personal clinical decisions made between patients and their physicians," he said.
Collis added AmerisourceBergen takes its role in the supply chain seriously, including giving daily updates to the DEA of all controlled substances shipped to its customers and proactively stopping suspicious orders.
AmerisourceBergen's revenue jumped 12.2% in its first quarter of fiscal 2019 to $45.4 billion. The company also drew $1.3 billion in gross profit during the quarter, a 16.6% increase over the prior-year period.
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