8-K
MCKESSON CORP (MCK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 25, 2022
McKESSON CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Delaware | 1-13252 | 94-3207296 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) |
6555 State Hwy 161
Irving, TX 75039
(Address of Principal Executive Offices, and Zip Code)
(972) 446-4800
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br>on which registered |
|---|---|---|
| Common stock, $0.01 par value | MCK | New York Stock Exchange |
| 1.500% Notes due 2025 | MCK25 | New York Stock Exchange |
| 1.625% Notes due 2026 | MCK26 | New York Stock Exchange |
| 3.125% Notes due 2029 | MCK29 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
|---|
On February 25, 2022, McKesson Corporation ("Company") and two other United States pharmaceutical distribution companies (collectively, "Distributors") determined that there is sufficient State and subdivision participation to proceed with an agreement ("Settlement") to settle a substantial majority of opioids-related lawsuits filed against the Distributors by U.S. states, territories and local governmental entities (collectively, "Settling Governmental Entities").
The Settlement will become effective on April 2, 2022. If all conditions to the Settlement are satisfied, including the receipt of approval by relevant courts of consent decrees to dismiss the lawsuits, the Distributors would pay the Settling Governmental Entities up to approximately $19.5 billion over 18 years, with up to approximately $7.4 billion to be paid by the Company for its 38.1% portion. Under the Settlement, a minimum of 85% of the settlement payments must be used by state and local governmental entities to remediate the opioid epidemic. Most of the remaining percentage relates to plaintiffs’ attorneys’ fees and costs, and would be payable over a shorter time period. Under the Settlement, the Distributors will establish a clearinghouse to consolidate their controlled-substance distribution data, which will be available to the settling U.S. states to use as part of their anti-diversion efforts. The Settlement provides that the Distributors do not admit liability or wrongdoing and do not waive any defenses.
The terms under which the Distributors previously agreed to settle opioids claims of the states of New York, Ohio, Rhode Island, Florida and Texas, and each of their participating subdivisions, will become part of the Settlement. The previously disclosed agreement for the Distributors to settle opioids claims of the attorney general of West Virginia will remain a separate settlement arrangement that is not part of the Settlement. Accordingly, as previously disclosed, 46 of 49 eligible states, as well as the District of Columbia and all eligible territories, have agreed to join the Settlement. A list of the Distributors, states and territories that have agreed to the Settlement is attached as Exhibit 99.1.
| Item 7.01 | Other Events. |
|---|
A news release issued by the Distributors on February 25, 2021 to announce the Settlement is attached as Exhibit 99.2.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | List ofDistributors,states and territories that have agreed to the opioids-related Settlement. |
| 99.2 | Jointex992pressrelease-jointnew.htmnewsex992pressrelease-jointnew.htmreleaseex992pressrelease-jointnew.htmissuedex992pressrelease-jointnew.htmbyex992pressrelease-jointnew.htmtheex992pressrelease-jointnew.htmDistributorsex992pressrelease-jointnew.htmonex992pressrelease-jointnew.htmFebruaryex992pressrelease-jointnew.htm25,ex992pressrelease-jointnew.htm2022 |
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 25, 2022
| McKesson Corporation | ||
|---|---|---|
| By: | /s/ Lori A. Schechter | |
| Lori A. Schechter | ||
| Executive Vice President, Chief Legal Officer | ||
| and General Counsel |
Document
Exhibit 99.1
| List of states and territories that have agreed to the opioids-related Settlement: | | --- || Alaska | Missouri | | --- | --- | | American Samoa | Montana | | Arizona | N. Mariana Islands | | Arkansas | Nebraska | | California | Nevada | | Colorado | New Hampshire | | Connecticut | New Jersey | | Delaware | New Mexico | | District of Columbia | New York | | Florida | North Carolina | | Georgia | North Dakota | | Guam | Ohio | | Hawaii | Oregon | | Idaho | Pennsylvania | | Illinois | Puerto Rico | | Indiana | Rhode Island | | Iowa | South Carolina | | Kansas | South Dakota | | Kentucky | Tennessee | | Louisiana | Texas | | Maine | Utah | | Maryland | Vermont | | Massachusetts | Virgin Islands | | Michigan | Virginia | | Minnesota | Wisconsin | | Mississippi | Wyoming |
List of Distributors that have agreed to the opioids-related Settlement:
| AmerisourceBergen Corporation |
|---|
| Cardinal Health, Inc. |
| McKesson Corporation |
1
Document
Press Release Exhibit 99.2
Distributors Approve Opioid Settlement Agreement
46 of 49 Eligible States and Over 90 Percent of Litigating Political Subdivisions Participate
CONSHOHOCKEN, PA. & DUBLIN, Ohio & IRVING, Texas, February 25, 2022 - (BUSINESS WIRE) - AmerisourceBergen (NYSE: ABC), Cardinal Health (NYSE: CAH) and McKesson (NYSE: MCK) announced today that each company has independently determined that there is sufficient participation by states and litigating political subdivisions to proceed with a comprehensive agreement to settle the vast majority of the opioid lawsuits filed by state and local governmental entities.
The companies have previously disclosed that 46 of 49 eligible states, as well as the District of Columbia and all eligible territories, have agreed to join the settlement. As of February 25, 2022, more than 90 percent of eligible political subdivisions that have brought opioid-related suits against the companies, as calculated by population under the agreement, have agreed to participate in the settlement or have had their claims addressed by state legislation.
The settlement will provide thousands of communities across the United States with up to approximately $19.5 billion over 18 years. The three distributors will also implement injunctive relief terms, including establishing a clearinghouse that consolidates data from all three distributors. This data will be available to all settling states and territories to use as part of their anti-diversion efforts.
While the companies continue to strongly dispute the allegations made against them, they believe that the implementation of this settlement is a key milestone toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States that have been impacted by the opioid epidemic.
The companies would be responsible for up to approximately the following contributions, payable over 18 years:
•AmerisourceBergen: $6.1 billion
•Cardinal Health: $6.0 billion
•McKesson: $7.4 billion
The effective date of the agreement is April 2, 2022. The final step before the effective date is for the participating states and territories, together with the distributors, to seek court-ordered consent judgments embodying the terms of the settlement. The distributors’ first annual payment, which is currently in escrow, will be released to the participating states on the effective date or as soon thereafter as all conditions under the settlement have been met.
Press Release Exhibit 99.2
This settlement only addresses the claims of U.S. state and territorial attorneys general and political subdivisions in participating states and territories. The states of Alabama, Oklahoma and Washington chose not to participate in the settlement. The state of West Virginia previously settled with the companies, and its subdivisions are not part of this settlement. The companies previously settled with the Cherokee Nation and have reached a separate agreement in principle to settle the claims of the remaining federally recognized Native American Tribes.
Cautionary Statements Regarding Forward Looking Statements
The preceding descriptions of the resolution of certain governmental entities’ opioids-related claims against pharmaceutical distribution companies constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those in those statements. It is not possible to identify all such risks and uncertainties. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the companies undertake no obligation to publicly update forward-looking statements. Risk factors include, but are not limited to: the distributors and participating states and territories may not obtain by the anticipated effective date consent judgments dismissing lawsuits and claims; the Settlement is not expected to result in a resolution of all governmental entity claims against each company regarding its role in distributing opioids; the companies expect to continue to experience costly and disruptive legal disputes and settlements related to distribution of controlled substances, including opioids; the companies might experience losses not covered by insurance; and the companies might be adversely impacted by changes in tax legislation or challenges to their respective tax positions. Investors should read the important risk factors described in each company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission.
About AmerisourceBergen
AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our 42,000 global team members power our purpose: We are united in our responsibility to create healthier futures. Learn more at investor.amerisourcebergen.com.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for healthcare facilities. With 50 years in business, operations in more than 40 countries and approximately 48,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.
Press Release Exhibit 99.2
About McKesson Corporation
McKesson Corporation is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions. McKesson partners with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare to help provide the right medicines, medical products and healthcare services to the right patients at the right time, safely and cost-effectively. United by our ICARE shared principles, our employees work every day to innovate and deliver opportunities that make our customers and partners more successful - all for the better health of patients. McKesson has been named a “Most Admired Company” in the healthcare wholesaler category by FORTUNE, a “Best Place to Work” by the Human Rights Campaign Foundation, and a top military-friendly company by Military Friendly. For more information, visit www.mckesson.com.
AmerisourceBergen
Investor Contact:
Bennett S. Murphy
610-727-3693
bmurphy@amerisourcebergen.com
Media Contact:
Gabe Weissman
610-727-3696
gweissman@amerisourcebergen.com
Cardinal Health
Investor Contact:
Kevin Moran
614-757-7942
kevin.moran@cardinalhealth.com
Media Contact:
Erich Timmerman
847-887-1487
Erich.Timmerman@cardinalhealth.com
McKesson
Investor Contact:
Rachel Rodriguez
469-260-0556
Rachel.Rodriguez@McKesson.com
Media Contact:
David Matthews
214-952-0833
David.Matthews@McKesson.com
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