Ohio AG Sues Opioid Distributors McKesson, Cardinal Health


• Four distributors accused of dispensing 739 million opioids in Ohio annually between 2011 and 2016
• Cardinal Health, Ohio’s highest-revenue company, now faces claims in state and federal courts in Ohio


McKesson, AmerisourceBergen, Cardinal Health, and Miami-Luken Inc. allegedly distributed 4.4 billion doses of opioids in Ohio between 2011 and 2016, violating federal and state laws meant to stop diversion of drugs, according to an Ohio attorney general suit.

The suit, filed Feb. 26 in state court, breaks with Ohio Attorney General Mike DeWine’s (R) recent attempts to negotiate settlement with drug distributors. The office is also suing drugmakers in state court and participating in multidistrict federal litigation negotiations in Cleveland that involve hundreds of suits against both drugmakers and distributors.

This state suit is the first time Ohio is bringing Dublin, Ohio-based Cardinal Health into court on opioid diversion charges the company has faced and settled in neighboring West Virginia. Cardinal Heath is Ohio’s largest company by revenue ($130 billion in fiscal year 2017) and has 6,600 employees.

The Ohio Attorney General’s Office didn’t respond to request for comment about this change in strategy, which Cardinal Health criticized. The company said it was “cooperating constructively in a good faith effort” before the suit was filed, both in the multidistrict litigation and with a multistate group of more than 40 attorneys general.

“We are extremely disappointed that Attorney General DeWine chose to go outside of these established processes at this critical moment in time to file this unfounded lawsuit,” the company said in a Feb. 26 statement.

$1 Billion in Annual Damages

Like other cities, counties, and states, Ohio claims distributors failed to prevent opioids from being overprescribed. However, few states have experienced a crisis as deep as Ohio.

The state estimates costs up to $1 billion annually for increased law enforcement, medical care, coroner, and welfare services to combat opioid abuse. Meanwhile, overdoses continue to climb. In Madison County, where the suit was filed, 126 overdosed during the first nine months of 2017 alone, and the state estimates 14 people die in Ohio each day from overdoses.

The state claims distributors are responsible for “diversion,” which means the companies allegedly filled suspicious orders from retailers that were either unusually large compared to the population of communities or unusually frequent. The state claims that filling orders that were the equivalent of 65 pills per each Ohioan per year violated the federal Controlled Substances Act and similar state law.

AmerisourceBergen told Bloomberg Law in a Feb. 26 email that the company only makes 2 percent of its sales from opioid-based products and mitigates against diversion in several ways.

“Beyond our reporting and immediate halting of tens of thousands of potentially suspicious orders, we refuse service to customers we deem as a diversion risk and provide daily reports to the DEA that detail the quantity, type, and the receiving pharmacy of every single order of these products that we distribute,” spokesperson Keri Mattox said. She didn’t comment on whether the company is engaged with settlement negotiations with Ohio.

Previous Settlement Talks

In October DeWine demanded several drugmakers and distributors come to the settlement table or face increased litigation. After that, DeWine announced he was in negotiations with Cardinal Health, which has faced similar diversion cases in other states.

In January 2017, Cardinal Health agreed to pay neighboring West Virginia $20 million and Chesterbrook, Pa.-based AmerisourceBergen agreed to pay $16 million to settle state claims that the companies sold their drugs to “pill mills”—medical providers that overprescribed opioids—that then fueled the state’s prescription-drug abuse problem. Also that month, McKesson agreed to pay a $150 million civil penalty for alleged violations of the federal Controlled Substances Act.

However, since then focus has switched to multidistrict litigation with claims from more than 200 cities, counties, and states. The leaders for the drug companies and plaintiff governments are scheduled to discuss settlement before the court March 6.
McKesson and Miami-Luken didn’t immediately respond to requests for comment.

The case is Ohio v. McKesson Corp., Ohio Ct. Com. Pl., No. CVH 20180055, 2/26/18.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio, at aebert@bloomberglaw.com
To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com