| NEW YORK, July 27
NEW YORK, July 27 U.S. drug wholesaler McKesson
Corp has agreed to pay $151 million to settle state
claims that it inflated pricing information for over 1,400 brand
name drugs, causing Medicaid to overpay for the drugs.
New York Attorney General Eric Schneiderman said the
settlement resolves claims by 30 states that McKesson violated
state and federal false claims acts. New York and California led
negotiations for the states, Schneiderman said in a statement on
Friday announcing the settlement.
In April, McKesson agreed to pay $190 million to settle with
the federal government over its portion of Medicaid costs.
McKesson reported inflated pricing data to First DataBank, a
publisher of drug prices that most state Medicaid programs use
to set payment rates for pharmaceutical reimbursement,
McKesson marked up prices by 25 percent on brand name
prescription drugs when reporting to FirstData, although the
prices didn't reflect what the company actually charged for the
drugs, court papers said.
"This settlement holds McKesson accountable for attempting
to make millions of dollars in illegal profits," Schneiderman
said in the statement.
McKesson denied wrongdoing when it settled with the federal
government in April.
New York will receive $64 million of the $151 million in
restitution, Schneiderman said, more than any other state.
Federal and state governments have recovered more than $2
billion from drug companies alleged to have reported inflated
pricing information, U.S. Attorney Paul Fishman in New Jersey,
who announced the federal settlement, said in April.
McKesson reported fiscal first-quarter earnings Thursday
well above forecasts, helped by cost cuts and
lower-than-expected taxes, but its revenue came in below Wall
The case is U.S., ex rel. Morgan v. Express Scripts Inc et
al, U.S. District Court, District of New Jersey, No. 05-01714.