LEGAL NEWSLINE

MADISON, Wis. (Legal Newsline) - Wisconsin Attorney General J.B. Van Hollen announced an agreement Tuesday with a pharmaceutical wholesaler and a publisher to resolve allegations that they defrauded the state Medicaid program.

McKesson Corporation, the largest pharmaceutical distributor and wholesaler in the U.S., and First DataBank Inc., a division of publisher The Hearst Corporation, allegedly conspired to violate the Wisconsin Medicaid fraud statute, the False Claims Act and the Deceptive Trade Practices Act by inflating reported drug prices to increase pharmacies' Medicaid reimbursement. The allegedly inflated prices caused the Wisconsin Medicaid program to overpay for the drugs it bought.

It is unlawful in the state of Wisconsin for any company or person to make false, misleading or deceptive representations with respect to the sale of pharmaceuticals.

"This settlement reflects our continued efforts to protect Wisconsin taxpayers while continuing to provide medical assistance for our neediest citizens," Van Hollen said. "By causing inflated drug prices to be reported and published and concealing that information, McKesson and First DataBank knew that the program would overpay for pharmaceuticals."

Under the terms of the settlement, McKesson paid the state $13,916,115.60 and First DataBank provided the state with $276,881.25 in credits for its services. The McKesson payment consisted of$11,596,763 in restitution to Wisconsin Medicaid and $2,319,352.60 for attorney costs and fees.

The settlement does not resolve a separate and distinct lawsuit filed by the state asserting claims against dozens of pharmaceutical manufacturer defendants based on a similar matter involving allegedly inflated drug prices. The claims against the manufacturer defendants remain pending.