All Dollars, No Sense: The Opioid Crisis

Drug overdose is the leading cause of death for those under the age of 50 and sixty percent of those deaths are attributable to opioids. It almost goes without saying that in America, the abuse of opioids has reached epidemic proportions.

Independent of the emotional toll addiction takes on family, friends and colleagues it’s costly to the federal and state governments that have to deal with it. According to the United States Center for Disease Control (CDC) when you consider public healthcare, treatment facilities, law enforcement, criminal justice and jail expenses, drug abuse costs approximately $75 billion per year.

In the past twelve years, both the state and federal government have decided to hold drug companies and distributors accountable. Companies such as Cardinal Health, McKesson Corporation, Purdue Pharma and Janssen Pharmaceuticals (a subsidiary of Johnson & Johnson), but there are many of these companies.

In some cases, these companies have been sued and reached sizable settlements with either the state or federal government, sometimes both. But what is the settlements dollar impact to their bottom line? Did the $11.75 million dollar settlement from Costco Health in 2017 impact their bottom line that year? In a word, no.

It was .59% of their $2 billion dollar net revenue.

While I’m not a financial expert, and don’t pretend to be, I do know how to read an annual return from a public company. Well, to be fair, I know how to navigate the reams of pages loaded with legalese in order to extrapolate the necessary numbers. It turns out, these companies are in good shape, regardless of the settlement amount.