McKesson settles federal false-claim allegations

NEWARK, N.J. (AP) — Federal authorities say wholesale drug distributor McKesson Corp. will pay more than $190 million to settle claims that it led Medicaid to overpay for drugs by reporting inflated prices to a publisher.

New Jersey U.S. Attorney Paul Fishman and other officials said Thursday that McKesson marked up the average drug prices it reported to publisher First DataBank by 25 percent between 2001 and 2005.

Most state Medicaid programs use First DataBank information to determine what they pay for drugs.

Authorities say Medicaid ended up paying too much for a variety of brand-name pharmaceuticals that McKesson sells. They said the alleged scheme violated the False Claims Act.

In a statement, McKesson denied manipulating drug prices or violating any law. It said it settled to avoid the costs and uncertainty of litigation.