America’s largest medical supply and pharmaceutical company McKesson has been under intense scrutiny recently for its apparent role in the country’s growing problem with prescription drug abuse and the opioid epidemic. An issue which has been going on for over a decade, The United States Department of Justice and the Drug Enforcement Administration have conducted multiple investigations into the company’s practices of distributing opioid medications like oxycodone and hydrocodone in suspiciously high quantities across the country. This has led to multiple monetary sanctions across the country, but until recently these actions have not resulted in any significant change.
The crux of the argument that McKesson has made a significant contribution to the problem of prescription drug abuse is that they have consistently failed to develop and utilize oversights which are supposed to prevent them from shipping “suspicious” quantities of these narcotic medications to pharmacies. While McKesson isn’t responsible for prescribing these drugs or selling them directly to patients, this comes down to individual doctors and pharmacies, they are responsible for tracking their wholesale orders and reporting and unusually high amounts to the DEA. This however has not been happening and the result has been skyrocketing revenues and stock prices for McKesson, all at the expense of millions of Americans who struggle with prescription drug abuse.
America’s prescription drug abuse problem
Prescription drug abuse is a major problem in our country, plain and simple. The sheer number of prescription opioids which are making their way into the general public are staggering, which has led to a massive increase of fatal overdoses in almost every part of the country. This is not only taking an emotional toll on the families of the individuals who are losing their lives, but it is creating a financial burden for the healthcare system which for many people is subsidized by state and federal governments. As this is occurring, there are pharmaceutical and medical distribution companies which are cashing in on the prescription drug abuse issue plaguing perhaps millions of Americans.
While fatal overdoses have risen for all forms of opiates, including heroin, most experts point to prescription opioids as the biggest factor in the recent rise of opioid addiction across America. Prescription opioids like oxycodone (Percocet, Oxycontin) and hydrocodone (Vicodin) are the most commonly abused medications in the country. Whether obtained legally in the form of a prescription from a doctor, or from the medicine cabinet of a family member or a close friend, pain killing medications have a very high potential for addiction and many have claimed that they are being overprescribed, leading to a glut of these medications entering into the black market.
The abundance of these addictive opioids, as well as the ease in which they can be acquired, has gradually placed more and more Americans into situations where they find themselves struggling with prescription drug abuse. After more than three decades of widespread prescribing of opioids, it is estimated that over 2 million Americans now regularly use some form of the medication. In fact, while the United States only has around 4.4 percent of the total global population it is estimated that we use around 80 percent of the total opioid supply in the world. This single figure alone highlights how significant the prescription drug abuse epidemic truly is.
The problem which led from widespread use of opioids to a full-blown opioid crisis has to do with just how addictive these substance can be. Not only do prescription opioids have the potential to cause serious physical dependence, which can lead to uncomfortable withdrawal symptoms if someone stops taking them, but they can also be extremely psychologically addictive. Many times after a person either takes prescription opioids for a legitimate medical condition or recreationally after getting them from a friend or family member, they can become addicted. After the prescription runs out many times people will turn to street drugs like heroin to continue to feed their addiction because it is often times not only easier to acquire but cheaper as well.
The continued widespread use of these prescription opioids is essentially creating more addicts with every passing day. Unfortunately the way that out healthcare system is currently constructed, it is much easier to become addicted to opioids than it is to be successfully treated for an addiction to them. This, which is the crux of the issue in the overall opioid crisis, has been going on for over a decade and leaves us where we are today; millions of Americans struggling with an addiction to opioids without widespread access to treatment. It is because of this fact that people are dying, because the sad fact about opioid addiction is that when left untreated it is often times fatal.
While the issue is complex, there should be little doubt that the rapidly growing profits of companies such as McKesson are in part directly related to their willingness to turn a blind eye to the prescription drug abuse issue in the country and happily distribute as much of this dangerous, potentially fatal, medication to as many people as possible.
Who is McKesson?
The McKesson Corporation is the largest distributor of pharmaceuticals and medical supplies in the country. According to earning statements the company had revenues of $198.5 billion in 2017. This level of revenue has consistently placed it on the list of Fortune 5 companies in America as one of the highest earning companies in the entire country.
McKesson was founded in the mid-19th century as an importer and wholesaler of botanical and natural drugs and medications and has grown steadily as the countries healthcare industry has grown by leaps and bounds over the 20th and beginning of the 21st century.
The company has not been immune to controversy however as it has been involved in two major scandals in the past 75 years, including a major financial and accounting scandal in the 1930s as well as the much more recent opioid distribution scandal of the past 10 years which has led to its agreeing to pay $163.25 million in civil settlements, including a recent $150 million settlement with The United States Department of Justice. This is paired with a similar settlement it made in 2008 to pay $13.25 million.
According to McKesson’s website, their mission statement is “Together with our customers and partners, we are creating a sustainable future for health care. Together we are charting a course to better health.” However, their continued violations of the regulations set in place by the Drug Enforcement Administration to combat overdistribution of suspiciously high amounts of opioid medications such as oxycodone and hydrocodone to multiple pharmacies across the country. Many experts have pointed out to overdistribution of these types of drugs as one of the leading causes of America’s growing problem with prescription drug abuse.
McKesson’s recent involvement with these issues which are directly related to the countries opioid epidemic of prescription drug abuse, coupled with their increased earnings, seem to be is direct contrast with their mission statement as the company has clearly profited from the overdistribution of these harmful medications. The company’s stock has nearly tripled in the past decade while company CEO John Hammergren has earned $692 million in compensation over the past 10 years, according to CNN Money. This is among the highest compensation level for any executive in the country, all while the country has been involved in the increasingly critical prescription drug abuse problem in America.
McKesson’s contribution to the opioid epidemic
McKesson is by no means solely responsible for the rapid increase in prescription drug abuse across the country. That responsibility is spread out across numerous areas which include distribution companies like McKesson, irresponsible doctors, pharmacies, regulators, law enforcement officials and the individuals themselves. It all adds up to a complex mosaic that is the opioid epidemic and in order for there to be real progress in fixing it, all of these areas are going to need to be addressed.
In the case of pharmaceutical distribution companies, specifically McKesson, the issue has been their lack of willingness to report suspiciously large shipments of opioids to certain areas of the county. McKesson, as a part of their DEA license to distribute controlled substances, is required to report and suspiciously large shipments directly to the DEA for their investigation. The threshold for what constitutes a suspiciously large shipment however is essentially left up to the distributor and investigations by the DEA and Department of Justice have shown that McKesson would simply raise the threshold when a shipment exceeded it as opposed to filing a report.
In some cases, small towns in areas of the country like Colorado were receiving shipments of opioid medications which would normally go to much larger cities. Situations like this should have raised red flags as the number of prescription pills were exceeding the number of citizens in the city many times over. However, instead of reporting this to the DEA apparently McKesson simply changed their requirements for what constitutes a suspicious amount and went on making the abnormally large shipments.
This has resulted in the diversion of large amounts of prescription opioids onto the black market, driving down the price of these drugs and increasing the overall availability to addicts which has compounded the prescription drug abuse problem greatly. It is not McKesson’s responsibility to fix the entire opioid epidemic, however the current situation should mandate that they at least be part of the solution instead of the problem.
DEA sanctions against the company
Due to these continued violations pointed out by the DEA and the U.S. Department of Justice, McKesson has recently not only agreed to pay $150 million in civil penalties but has also agreed to suspend its distribution of controlled substances in the states of Colorado, Ohio, Michigan and Florida for multiple years. It has also agreed to abide to enhanced terms of compliance with the DEA for the next five years, however it remains to be seen if this will have the desired impact of drastically reducing the amount of excess opioid medication on the streets of America.
While these sanctions can be seen as a slight victory towards more responsible distribution of opioid medications, some feel that they did not go far enough for a couple of reasons. For one, this is the second settlement that McKesson has reached with the Department of Justice, the first one coming in 2008 for almost the exact same issue. That settlement was only for $13.25 million, so the more recent settlement is certainly more significant, however when compared to the yearly revenues that McKesson generates either of these penalties amounts to little more than a slap on the wrist.
To put things simply, McKesson is a publicly traded company in a capitalist system and it’s number one goal is to create wealth for its shareholders. Because there have been no criminal ramifications and little financial penalties, the motivation to change is tenuous at best considering the fact that the sales and distribution of these drugs is a significant part of the companies bottom line.
This settlement is still a good start to holding the many parts of the healthcare system, which is partially responsible for the increase in prescription drug abuse across the country, accountable and it provides some concrete evidence that authorities are taking serious steps towards putting a dent in the devastation that the opioid epidemic is causing. However, it is certainly possible that more severe sanctions will be necessary moving forward.