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McKesson Agrees to Pay Georgia Medicaid Over $5 Million to Settle Allegations of Inflating Prescription Drug Costs

PRESS ADVISORY

McKesson Agrees to Pay Georgia Medicaid Over $5 Million to Settle Allegations of Inflating Prescription Drug Costs

July 30, 2012

Attorney General Sam Olens has announced that the State of Georgia, as part of a national settlement with 29 other states against the McKesson Corporation, has resolved allegations that McKesson violated the Federal False Claims Act and various state false claims acts. The State alleges that McKesson reported inflated pricing data for a large number of prescription drugs, causing the Medicaid program to overpay for those drugs. Georgia Medicaid is funded jointly by the federal government and the State of Georgia.

The drug pricing data at issue in this settlement concerns the “Average Wholesale Price” (AWP) benchmark used by most states, including Georgia, to set pharmacy reimbursement rates for pharmaceuticals dispensed to Georgia Medicaid beneficiaries. The State alleges that McKesson, one of the largest drug wholesalers in the country, reported inflated AWP pricing data to First Data Bank, a publisher of drug prices, thereby inflating many AWPs that are used by Georgia to set reimbursement.  In April, the federal government settled the federal portion of this lawsuit for over $187 million; this agreement recovers the state Medicaid share for Georgia

The State of Georgia’s recovery through the national multi-state settlement is $5,363,042.05. The overall recovery attributable to Georgia’s Medicaid program, which includes McKesson’s April 2012 payments to the federal government for damages suffered by Georgia’s Medicaid program and the state settlement announced today, is $13,738,167.51.

The suit was filed in US District Court in New Jersey