NEWARK – As part of a settlement agreement, the McKesson Corp. will pay the federal government more than $190 million for violating the False Claims Act by reporting inflated prices for numerous prescription drugs, causing Medicaid to overpay for those drugs, the U.S. Attorney’s Office said Thursday.
The government alleges that McKesson, a large drug wholesaler, 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.
“This is the latest example of a corporation’s intentionally manipulating the complicated system by which drug purchases are reimbursed,” said U.S. Attorney Paul Fishman in a statement. “We have no tolerance for those who take advantage of that system to bring in more business by falsely increasing reimbursements to retailers.”
The Medicaid program is funded jointly by the federal and state governments. This settlement resolves claims based on the federal share of Medicaid overpayments caused by McKesson’s conduct, Fishman’s office stated.
In addition to the $190 million – which represents the $187 million settlement and interest – state governments can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments, the U.S. Attorney’s Office reported.
The settlement is based on the federal allegations that McKesson reported inflated mark-up percentages to FDB for a wide variety of brand name drugs, causing FDB to publish inflated prices for those drugs.
According to Fishman, federal and state governments have so far recovered more than $2 billion from drug manufacturers that were alleged to have reported inflated information to FDB and other publishers of drug prices.