SF Drug Wholesaler Settles Lawsuit Alleging Inflated Prescription Prices
SAN FRANCISCO (CBS SF) — California will receive $23.6 million from San Francisco-based McKesson Corp. in a settlement of claims of prescription drug price inflation, state Attorney General Kamala Harris announced Friday.
The agreement with California is part of a $151 million settlement with 29 other states and the District of Columbia.
The states alleged that McKesson, one of the nation’s largest drug wholesalers, inflated the wholesale prices of prescription drugs by as much as 25 percent and thereby caused the states’ Medicaid programs to overpay millions of dollars in pharmacy reimbursements.
Harris said, “In these difficult budget times, it is crucial that California’s scarce public resources support the urgent needs of our state.
“We cannot allow dollars meant for patients to be diverted to inflate corporate profits,” she said.
McKesson said in the settlement document that it specifically denies any wrongdoing and that the company entered into the agreement to avoid the cost and inconvenience of lengthy litigation.
McKesson representative Kris Fortner said the claims against the company are without merit and the settlement is “in the best interest of our employees, customers, suppliers and shareholders.”
The allegedly inflated prices were reported to First Data Bank, which publishes a centralized list of wholesale prices used by states to reimburse pharmacies for drugs dispensed to Medicaid patients.
Medicaid, known as Medi-Cal in California, is a joint federal and state program that provides medical insurance to low-income people.
In April, the federal government reached a separate $187 million settlement with McKesson for the federal portion of the alleged price inflation.
The California and New York state attorneys general led the investigation and settlement of the 30 states’ claims against the company.
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