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Drug Distributor McKesson Pays $151 Million Settlement for Medicaid Fraud

The settlement resolves claims that for several years, ending in 2009, McKesson, a large drug distributor, reported inflated pricing data to First Data Bank (FDB), a publisher of drug prices that are used by New York to set payment rates for pharmaceutical reimbursement. In April, the federal government reached an agreement with McKesson to resolve the federal portion of Medicaid; the July 27 agreement resolved the state portion of Medicaid for New York and 29 other states.

The drug-pricing data at issue relates to the Average Wholesale Price (AWP) benchmark used by most states, including New York, to set payment rates for pharmaceuticals. The settlement was based on charges that McKesson reported inflated mark-up percentages to FDB for hundreds of brand-name drugs, causing FDB to publish inflated AWPs for those drugs.

The investigation revealed that McKesson inflated the prices of more than 1,400 commonly prescribed medications, including Allegra, Ambien, Lipitor, Prozac, and Ritalin.

Read the press release for more information.

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