Case Name: McKesson

Settlement Fund: $141,000,000

Claim Filing Deadline: May 10, 2022

Class Period: 10/24/2013 - 10/27/2016

Pharmaceutical giant McKesson--distributor of one-third of all pharmaceuticals in the US--has settled a securities suit for $141 million. McKesson is the latest pharma company to settle a litigation over its alleged role in the generic drug price-fixing scandal that has marred the industry. (Teva Pharmaceutical Industries, Endo International, Novo Nordisk, and Allergan have each previously settled securities class actions pertaining to this scandal.)

Plaintiffs allege that McKesson, "knew or recklessly disregarded that generic drug price inflation was not the result of legitimate supply disruptions," and that, "the Company’s generic manufacturing suppliers were part of an overarching generic pharmaceutical price-fixing conspiracy." Starting in 2014, the skyrocketing price of generic drugs drew public outrage and Congressional investigations-- and according to plaintiffs, eventually wore down the price of McKesson's common stock.

Plaintiffs allege that during the class period, which spans October 24, 2013 through October 27, 2016, investors unknowingly benefited from the scheme, seeing their share price nearly double, but suffered once the conspiracy collapsed. On the final date of the class period, McKesson CFO James Beer announced during a call about second-quarter results that the company's profits had been hurt by, “competitive customer pricing and softness in brand inflation. We expect these two headwinds to drive a combined reduction of between approximately $1.60 and $1.90 to our fiscal 2017 adjusted earnings per share.” The next day, McKesson’s stock price fell over 22%.

Beer's anodyne explanation for McKesson's "headwinds" were belied a week later, on November 3, 2016, when Bloomberg reported that the Department of Justice had been investigating the generic drug industry for the past two years. The demise of a broad conspiracy to fix prices was, according to plaintiffs, the true cause of the "weaker pharmaceutical pricing trends" that Beer had discussed on the October 27 call.

Claim forms are due on May 10, 2023. If you have any question about this case, or about any other litigation, please let us know.