3:06 pm - Sunday September 26, 8213

McKesson to Pay Colorado more than $3.5 Million‏

McKesson to Pay Colorado more than $3.5 Million Resolving Abuses of
Inflated Pricing for Prescription Drugs
$151 Million Recovered in Multistate False Claim Pricing Settlement

Attorney General John Suthers announced today that Colorado, as
part of a national settlement against the McKesson Corporation (NYSE:
MCK), the largest pharmaceutical distributor in North America that
distributes one-third of the medicines used every day, has resolved
allegations that McKesson violated the Federal False Claims Act and
various state false claims acts. By reporting inflated pricing data
for a large number of prescription drugs, McKesson caused the state’s
Medicaid program to overpay for those drugs. Medicaid is funded
jointly by the federal government and the State of Colorado.

“The Colorado Office of the Attorney General will continue to work
with other states to insure that taxpayer money is safeguarded, so
that state money dedicated to Medicaid will go for the provision of
legitimate medical expenses,” said Attorney General John Suthers.

The drug pricing data at issue in this settlement concerns the Average
Wholesale Price (AWP) benchmark used by most states, including
Colorado, to set pharmacy reimbursement rates for pharmaceuticals
dispensed to Colorado Medicaid beneficiaries. Colorado alleges that
McKesson reported inflated AWP pricing data to First Data Bank (FDB),
a publisher of drug prices, thereby inflating many AWPs that are used
by Colorado to set reimbursement. In April, the federal government
settled the federal portion of this lawsuit for more than $187
million. This agreement recovers Colorado’s Medicaid share.

Colorado’s recovery through the national multistate settlement
announced today is $1,659,701.73. The overall recovery attributable to
Colorado’s Medicaid program (representing McKesson’s April 2012
payments to the federal government for damages suffered by Colorado’s
Medicaid program, combined with the state settlement announced today),
is $3,555,691.75. The settlement money will go directly to the state’s
Medicaid program and is to be paid with interest by July 30, 2012.

The suit was filed in U.S. District Court in New Jersey and joined by
38 states and the District of Columbia. To date, federal and state
governments have also 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

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