Generic Drug Price-Fixing Allegations Lead to McKesson's $141 Million Settlement

McKesson Joins Allergan, Endo International, and Other Pharam Companies with latest fund

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.


More News from the Class Action World

Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720


Read More

Read More

Case Name: ... Read More

Read More

Case Name 1: The Kraft Heinz Company

Read More

Case Name: Cardinal Health

Settlement Fund: $109,000,000

<... Read More

Cornerstone Research has released its yearly securities class action litigation report and found dramatic increases in the number of settlements and in the average settlement pools. (The link to the full report is below.)

Cornerstone focused on federal securities class actions, specifically cases al... Read More

Case Name: Micro Focus

Settlement Fund: $107,500,000

Claim Filing Deadline: 5/30/2023

Class: All persons who purchased or acquired Micro Focus American Depositary Shares (“ADSs”) issued in connection with the Merger of Micro Focus and the software business segment of HPE (the “Merger”), which was c... Read More

Case Name: Wells Fargo 2018 Litigation

Settlement Fund: $300,000,000

Claim Filing Deadline: TBD

Class Period: 11/3/2016 -- 8/3/2017

Chicago Clearing Corporation is tracking a new $300 settlement with Wells Fargo. As of today (2/23/23) proof of claim forms and notices are not yet available, but recovery could be substanti... Read More