At the time, the two stories — Texas public health officials grappling with an overdose epidemic while the governor’s office worked on economic development — seemed unrelated. When Abbott announced he would give McKesson a $9.75 million grant from the state’s Enterprise Fund to woo the pharmaceutical distributor into expanding its operations in North Texas, he mostly received favorable news coverage for promising nearly 1,000 jobs to the local Irving economy.
But as the state and nation’s focus on the opioid crisis has sharpened in recent months, McKesson and other drug companies have come under legal scrutiny and the deal has put Abbott in an uncomfortable position.
Texas has since joined a multistate investigation into pharmaceutical companies, including McKesson, over whether they are responsible for feeding the nation's opioid crisis and whether they broke any laws in the process. Several Texas counties have moved to sue McKesson and other companies for economic damages, alleging that manufacturers downplayed addiction risks and their distributors failed to track suspicious orders that flooded communities with pills.
The state grant to McKesson, worth about $10,000 for each job it brought to North Texas, is the largest Abbott has doled out from the Enterprise Fund, the controversial deal-closing incentives program created in 2004 under former Gov. Rick Perry. No U.S. state or local government has publicly given McKesson a more generous grant since 2000, according to data compiled by Good Jobs First, a Washington D.C.-based group that tracks government subsidies and other economic incentives.
In statements at the time, Abbott said the company’s expansion would “serve as an invaluable contribution to the Texas economy.”
But if Texas decides to sue McKesson, as several of its counties have, lawyers for the state will likely argue the opposite has happened — at least in the context of the company’s distribution of opioids. Across the country, local and state governments have begun to argue they are bearing the financial burden associated with opioid addiction.
