29 States Collect $151 Million from McKesson For Overcharging Medicaid

On July 27, 2012, it was announced that the McKesson Corporation agreed to pay $151 million to 29 states to settle allegations that the company artificially raised Medicaid drug prices, resulting in excess charging for prescription medications.  More specifically, it was alleged that McKesson provided inflated prescription-drug information for a wide variety of brand-name drugs and the knowledge that the information would be given to First DataBank, which published drug market pricing information, would substantially inflate Medicaid drug prices throughout the United States.  This announcement follows the May 2012 announcement wherein McKesson paid the federal government over $190 million to settle a false claims act case based on related allegations.

McKesson is one of the nation’s largest drug wholesalers and is responsible for the sales of popular drugs like Pfizer’s Lipitor and Eli Lilly’s Prozac.  The settlement resolved claims that McKesson inflated approximately 1,400 brand-name drugs between 2000 and 2009 by as much as 25% which resulted in millions in inflated costs paid by Medicaid programs.

Of the 29 states involved in the state settlements, New York will receive $64 million and California will receive $23 million.  The remainder will be apportioned among the remaining states and the District of Columbia.

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