McKesson to pay $190 million to resolve false-claims allegations

McKesson Corp., a drug wholesaler and health information technology (HIT) provider, has agreed to pay the U.S. more than $190 million to resolve claims that it violated the False Claims Act by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.

In a news release, the U.S. Department of Justice stated that state governments can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments.

The government alleges that McKesson reported the inflated pricing data to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals.

The drug pricing data at issue relates to the “Average Wholesale Price” (AWP) benchmark used by Medicaid and other programs to set payment rates for pharmaceuticals. The settlement announced today is based on the United States’ allegations that McKesson reported inflated mark-up percentages to FDB for a wide variety of brand name drugs, causing FDB to publish inflated AWPs for those drugs. 

To date, federal and state governments have recovered more than $2 billion from drug manufacturers that were alleged to have reported inflated AWP information to FDB and other publishers of drug prices, according to the Department of Justice.