McKesson coughs up $190M to resolve False Claims Act allegations

McKesson 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, according to the U.S. Department of Justice (DoJ). 

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.

This settlement resolves claims based on the federal share of Medicaid overpayments caused by McKesson’s conduct. 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 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 is based on the DoJ's 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.

McKesson does not admit to any liability regarding the claims settled by this agreement.