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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
105
The two remaining matters are Holcombe T. Green and HTG Corp. v. McKesson Corporation, et al. (Georgia
State Court, Fulton County, Case No. 06-VS-096767-D) and Hall Family Investments, L.P. v. McKesson
Corporation, et al. (Georgia State Court, Fulton County, Case No. 06-VS-096763-F). Plaintiffs allege fraud and
deceit; additionally, plaintiff Green seeks indemnification in connection with a class action lawsuit, now settled,
which was filed on behalf of participants in the McKesson Corporation Profit Sharing Investment Plan against
McKesson Corporation and Green, among others, and for other unspecified losses. Plaintiffs seek actual and
punitive damages, attorneys’ fees and costs of suit in amounts unspecified in the complaint. The Company and
HBOC have answered the complaints in each of these actions, generally denying the allegations and any liability to
plaintiffs. In April 2007, we filed motions to disqualify the Green and Hall Family Investments, L.P. damages
experts, who had opined that plaintiffs incurred approximately $150 million in actual damages, and for summary
judgment. On December 13, 2007, the trial judge denied those motions. On January 3, 2008, following certification
by the trial court of an appeal from her rulings on the disqualification and summary judgment motions, we applied to
the Georgia Court of Appeals, seeking acceptance of an interlocutory appeal from the trial court rulings and on
January 29, 2008, the Court of Appeals granted that application. Our appeal has been fully briefed and was argued
to a three judge panel of the Court of Appeals on February 12, 2009, but no decision has yet been rendered.
II. Average Wholesale Price Litigation
The following matters involve a drug reimbursement benchmark referred to as the AWP utilized by some public
and private payors to calculate at least some portion of the amount a pharmacy will be reimbursed for dispensing a
covered branded drug.
Private Payor RICO and Antitrust Actions
On June 2, 2005, a civil class action complaint was filed against the Company in the United States District
Court, District of Massachusetts, New England Carpenters Health Benefits Fund, et al. v. First DataBank, Inc. and
McKesson Corporation, (Civil Action No. 1:05-CV-11148-PBS) (the “Private Payor RICO Action”). Plaintiffs are
four health benefit plans. The complaint alleges that in late 2001 and early 2002 the Company and co-defendant
First DataBank, Inc. (“FDB”) conspired to improperly raise the published AWP of certain prescription drugs and
that this alleged conduct resulted in higher drug reimbursement payments by plaintiffs and others similarly situated.
Plaintiffs purport to represent a class of third party payors and consumers who paid any portion of the price of
certain prescription drugs to the extent their portion was based upon the AWPs published by FDB during the period
January 1, 2002 to March 15, 2005.
The complaint purports to state claims against the Company based on the federal Racketeer Influenced and
Corrupt Organizations Act (“RICO,”) 18 U.S.C. § 1962(c); California’s Business and Professions Code §§ 17200
and 17500 and common law civil conspiracy. The complaint also alleges two additional claims against defendant
FDB only for violation of California’s Consumers Legal Remedies Act, California Civil Code § 1750 and for
common law negligent misrepresentation. Plaintiffs seek injunctive relief, as well as compensatory and treble
damages, attorneys’ fees and costs.
On July 21, 2006, the plaintiffs filed a First Amended Complaint (“FAC,”) asserting essentially the same claims
against the Company and adding an additional named plaintiff. The FAC also included an alternative count under
the consumer protection statutes of numerous states if the court determined that California law was not applicable to
the entire class. The FAC modified the definition of the alleged class to include third party payors (but not
consumers) whose pharmaceutical payments for certain prescription drugs were based upon AWP (not limited to the
AWP published by FDB) during the time period August 1, 2001 to March 15, 2005.