(Reuters) – McKesson Corp. has reached a tentative $141 million settlement with shareholders who sued claiming the drug distributor hid that it profited from a price-fixing conspiracy among generic drugmakers.
The company said in a regulatory filing on Wednesday that it expects to pay $141 million to settle the class action lawsuit accusing it of attributing price increases to nonexistent supply disruptions, rather than anticompetitive conduct by pharmaceutical companies.
McKesson did not admit wrongdoing as part of the settlement, which will be covered by insurance.
Investors have yet to seek approval for the deal from U.S. District Judge Charles Breyer in San Francisco. The judge denied a motion to dismiss the case in 2019, and allowed investors to proceed as a class in 2021.
Spencer Burkholz of Robbins Geller Rudman & Dowd, who represents lead plaintiff Pension Trust Fund for Operating Engineers, said the case was “especially hard fought” and the deal, if approved, represents an “excellent recovery” for the class.
A McKesson spokesperson did not immediately respond to a request for comment.
Regulatory probes into price fixing in the pharmaceutical industry have resulted in federal criminal charges against two companies, more than $450 million in fines and a wave of civil litigation by state and federal regulators.
Teva Pharmaceutical Industries Ltd and Glenmark Pharmaceuticals USA, which were charged with price fixing in 2020, have pleaded not guilty.
Shareholders also have sued drugmakers over the alleged conspiracy. Teva agreed in January to pay $420 million to settle a related shareholder lawsuit without admitting wrongdoing.
The case is Evanston Police Pension Fund v. McKesson Corp, U.S. District Court, Northern District of California, No. 18-cv-06525.
For the plaintiffs: Spencer Burkholz of Robbins Geller Rudman & Dowd
For McKesson: Sara Brody of Sidley Austin
Read more:
Teva, Glenmark can’t see grand jury evidence in price-fixing case -judge
States’ price-fixing case against generic pharma companies trimmed
Teva settles shareholder lawsuit over generic drug pricing for $420 mln
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