* McKesson said to report inflated drug prices
* Medicaid said to be overcharged
* McKesson not immediately available for comment
* Shares of McKesson rise 0.5 percent
By Jonathan Stempel and Debra Sherman
April 26 McKesson Corp, one of top U.S.
drug wholesalers, has agreed to pay more than $190 million to
settle claims that it had violated the federal False Claims Act
by reporting inflated pricing information for many prescription
drugs, causing Medicaid to overpay for them.
The settlement was announced Thursday by U.S. Attorney Paul
Fishman in New Jersey.
According to the government, McKesson reported inflated
pricing data to First DataBank, a publisher of drug prices that
most state Medicaid programs use to set payment rates for
The government accused McKesson of marking up prices on a
variety of drugs by 25 percent between Aug. 1, 2001, and March
It said McKesson's conduct had caused the United States and
individual states to pay inflated reimbursements on Medicaid
claims submitted between Aug. 1, 2001 and Dec. 31, 2009.
"We have no tolerance for those who take advantage of that
system to bring in more business by falsely increasing
reimbursements to retailers," Fishman said in a statement.
McKesson was not immediately available to comment.
According to settlement papers, McKesson "expressly denies"
the government's charges, as well as those of a whistleblower,
David Morgan, in a related civil lawsuit filed in New Jersey
federal court. The San Francisco-based company did not admit
liability or wrongdoing in agreeing to settle.
Fishman said state governments may negotiate separately with
McKesson to resolve claims based on their shares of the Medicaid
He also said federal and state governments had recovered
more than $2 billion from drug companies alleged to have
reported inflated pricing information.
Whistleblowers can receive 25 percent of settlement amounts
in False Claims Act cases, depending on how much work they
Neither Morgan nor his lawyer could be immediately located
for comment. Morgan filed his lawsuit in 2005, and added
McKesson as a defendant in 2006. The case remains under seal.
In morning trading, McKesson shares rose 0.5 percent to
$91.83 on the New York Stock Exchange.
The case is U.S. ex rel. Morgan v. Express Scirpts Inc et
al, U.S. District Court, District of New Jersey, No. 05-01714.