Adjusted operating profit for McKesson’s European pharmaceutical solutions division – which includes Lloydspharmacy and wholesaler AAH – in the three months to September was $43 million (£33.4m), a 19% drop on the same period the previous year, McKesson said in its latest financial report published yesterday (October 30).

The figures are mainly a consequence of the “challenging retail pharmacy environment in the UK”, McKesson explained.

However, it reiterated its prediction that there will be another increase in category M reimbursement prices in England before the end of the fiscal year, which will help towards a financial recovery across its European business.

In a conference call, CEO Brian Tyler said McKesson UK's retail business “experienced industry-wide underfunding by the NHS” in the three months to June.

However, “consistent with our expectations in July, we did see a nominal tariff increase in the month of August”, he added, and the company expects “a further upward tariff revision later this fiscal year”.

This “should result in a partial recovery of the underfunding we’ve experienced year-to-date”, Mr Tyler added.

McKesson chief financial officer Britt Vitalone later reiterated that the company continues “to anticipate improvement in the second half of fiscal 2020” across its European business.

Opioid litigation in the US

McKesson is one of the pharmaceutical companies being accused of profiting from driving up demand for opioids in the US.

According to the US Department of Health and Human Services, the opioid crisis began in the 1990s when pharmaceutical companies assured medical practitioners that patients would not develop an addiction to “opioid pain relievers”, resulting in an increase in the prescribing of these medicines.

This led to a “widespread misuse of both prescription and non-prescription opioids”, which claimed the lives of 47,600 people in 2017 alone, according to the Centers for Disease Control and Prevention, the national public health institute in the US.

Speaking during McKesson’s conference call yesterday, Mr Tyler said that last week McKesson reached “a collective $215m (£166m) settlement with two Ohio counties, Cuyahoga and Summit”, along with two other distributors, in a bid to resolve the opioid crisis and accelerate relief for those impacted by it.

However, McKesson “strongly disputes the allegations” and “is prepared and continues to be prepared to litigate and to vigorously defend the mischaracterisation that our company drove demand for opioids in this country”, he stressed.

Mr Vitalone added: “McKesson recorded $36m (£27.8m) in opioid-related litigation expenses for the three months to September and $72m (£55.6m) year-to-date.”

“We continue to assume opioid-related litigation costs to be approximately $150m (£115.8m) in fiscal 2020.”