States settle pricing allegations against McKesson

John O'Brien Jul. 27, 2012, 10:42am


SAN FRANCISCO (Legal Newsline) - Thirty states have settled fraud charges against drug maker McKesson Corporation for $151 million.

The settlement resolves allegations that the company inflated the price of its prescription drugs by as much as 25 percent when it reported prices to state Medicaid programs. The state attorneys general alleged the incorrect average wholesale prices caused their states' Medicaid programs to overpay.

"In these difficult budget times, it is crucial that California's scarce public resources support the urgent needs of our state," California Attorney General Kamala Harris. "We cannot allow dollars meant for patients to be diverted to inflate corporate profits."

The settlement stems from a 2005 whistleblower case filed under state and federal false claims statutes. The federal government's allegations were settled in April for $187 million.

California's portion of the settlement is more than $23 million. Harris said a team of attorneys and auditors from her office and New York Attorney General Eric Schneiderman's office led the investigation and conducted settlement negotiations.

The alleged actions took place from 2001-09.

Joining California and New York in the settlement are the District of Columbia and the following 27 states: Arkansas, Colorado, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maine, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming.

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