United States Announces False Claims Lawsuit Settlement with McKesson Corporation for Over $190 Million

Last week, the Department of Justice announced a settlement it reached with McKesson Corporation, a large drug wholesaler, for over $190 million to resolve false claims act allegations brought against the company.

According to the complaint, McKesson reported inflated pricing information for numerous prescription drugs it sells, resulting in Medicaid overpaying for those drugs.  Medicaid uses an Average Wholesale Price (AWP) benchmark in order to set payment rates for pharmaceuticals that Medicaid and other programs use and prescribe.  McKesson allegedly reported inflated pricing data to First DataBank, a publisher of drug prices that are used by most state Medicaid programs.  As a result, the AWP for these drugs was significantly higher than it should have been, causing Medicaid to pay more than it would have had McKesson properly reported the pricing data.

Medicaid is jointly funded by both the federal and state governments.  The announced settlement resolves claims based only on the federal share of the Medicaid overpayments caused by McKesson’s alleged misconduct.  In addition to the $190 million settlement with the federal government, state governments may also separately try to settle their claims with McKesson for additional compensation.

As one of the programs that is central to today’s healthcare debate, it is highly important that Medicaid is not paying more than it absolutely needs to.  In order to remain sustainable, it is crucial that companies who take advantage of the program are stopped and that the money they steal is recovered.  To date, federal and state governments have recovered over $2 billion dollars from drug manufacturers for reporting inflated AWP information.  Whistleblowers are a huge reason why so many companies are caught, stopped, and forced to repay the government.  If you are aware of fraud being committed against Medicaid or Medicare, you must take active steps to stop it.  For more information on how, contact the qui tam attorneys at Tycko & Zavareei today.

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