McKesson to Pay $1.4 Million to MaineCare Program in Healthcare Fraud Settlement

July 27, 2012

Drug Wholesaler to Pay $151 Million to States to Resolve Pricing Claims

AUGUSTA – Attorney General William J. Schneider announced today that Maine, as part of a national settlement against McKesson Corporation, has resolved allegations that McKesson violated the Federal False Claims Act and various state false claims acts by reporting inflated pricing information for a large number of prescription drugs, causing the state’s Medicaid program to overpay for those drugs.

The drug pricing data at issue in this settlement concerns the “Average Wholesale Price” (AWP) benchmark used by most states to set pharmacy reimbursement rates for pharmaceuticals dispensed to Medicaid beneficiaries. Maine alleges that McKesson, one of the largest drug wholesalers in the country, reported inflated AWP pricing data to First Data Bank (FDB), a publisher of drug prices, thereby inflating many AWPs that are used to set reimbursement.

The Medicaid program is funded jointly by the federal and state governments. In April, the federal government settled the federal portion of this lawsuit for over $187 million. As part of the settlement with the states, Maine will receive a total of $1,438,600.28 for the state Medicaid share.

“The State paid artificially high prices due to the manipulation of the drug reimbursement system by this corporation,” said Attorney General Schneider. “Through this settlement, MaineCare will receive restitution for those excessive payments.”

The suit was filed in US District Court in New Jersey. Maine was represented by a national settlement team comprised of members from the states of California and New York working through the National Association of Medicaid Fraud Control Units.

Assistant Attorney General Michael Miller, Director of the Healthcare Crimes Unit, handled this matter for Attorney General Schneider’s Criminal Division.

The Healthcare Crimes Unit is the Medicaid Fraud Control Unit for the State of Maine charged with investigating and prosecuting financial fraud and other crimes committed by MaineCare providers or their employees, and investigating and prosecuting abuse, neglect or exploitation of elderly and dependent persons that occurs in health care facilities or by health care providers.

To learn more about the Office of the Attorney General Healthcare Crimes Unit, go to: http://www.maine.gov/ag/crime/crimesweprosecute/healthcare_crimes.shtml