July 31, 2012

McKesson Corp., a large drug wholesaler in the United States, has agreed to pay $151 million to the District of Columbia and 29 U.S. states in order to settle claims that it inflated the prices of certain prescription medications that resulted in overpayments of millions of dollars in reimbursements from state Medicaid programs from 2001 to 2009. The company was charged with intentionally inflating prices by as much as 25% for more than 1,400 brand-name drugs, including common medications such as Adderall, Allegra, Ambien, Celexa, Lipitor, Neurotin, Prevacid, Prozac, and Ritalin.

The claims first came to light in 2005 when a whistle-blower filed a false claims lawsuit under both federal and state laws. The false claims lawsuit alleged that McKesson Corp. inflated the average wholesale prices of drugs that it reported to First Data Bank, which states rely on in order to establish reimbursement payment rates for their Medicaid programs. The U.S. had settled its part in the lawsuit for more than $187 million in April, 2012.

Besides the District of Columbia, the following states will share in the settlement:  Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maine, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, and Wyoming.

In addressing the settlement, a spokesperson for McKesson Corp. denied the merits of the claims against the company and stated, “given the inherent uncertainty of litigation, we determined that this settlement was in the best interest of our employees, customers, suppliers and shareholders. We did not manipulate drug prices and did not violate any laws.”

However, New York’s Attorney General stated in reference to the settlement, “Pharmaceutical distribution companies are not above the law. This settlement holds McKesson accountable for attempting to make millions of dollars in illegal profits.”


When we hear the constant barrage of the pundits of tort reform that “frivolous” medical malpractice claims are running up the costs of medical malpractice insurance for doctors who will abandon their medical practices as a result of the rise in their costs of doing business, we cannot help but hear their silence when members of an important part of the health care industry (that is, pharmaceutical companies) that are responsible for a large portion of health care costs in the United States are caught with their pants down and end up paying enormous amounts to settle claims that they flippantly say are “without merit” (McKesson Corp. is just one of several large pharmaceutical companies that have settled whistle-blower claims for violations of federal and state false claims laws recently).

Does it make sense to anyone that a for-profit business would pay $151 million to settle claims against it if the claims were “without merit”? If there is smoke, there is usually fire…

We would hope that those who may be honestly motivated in finding ways to keep down health care costs in the United States will focus on the real and major source of rising health care costs: health care fraud. The costs of settling medical malpractice claims in the United States (the vast majority of which are legitimate claims) are such a small portion of the total health care costs in the United States and represent justified payments that would otherwise have to be incurred by taxpayers who had nothing to do with committing the medical negligence. If the negligent medical providers (in reality, their medical malpractice insurance companies who voluntarily accept insurance premiums and report massive profits, year-after-year) are not held responsible for paying the costs of their substandard medical care, then the rest of us will have to pay for the necessary medical care required by the innocent victims of medical malpractice.

Why should we, the residents of the greatest country in the world, have to reach into our own pockets to pay for the negligent medical mistakes of doctors, hospitals,and other medical providers who had it within their sole control and ability to avoid the medical mistakes and medical errors that caused harm to their powerless patients?

If you are the victim of a medical mistake, medical error, hospital malpractice, or surgical malpractice in the United States, you should promptly seek the legal advice of a local medical malpractice attorney to protect your rights.

Click here to visit our website or telephone us toll-free at 800-295-3959 to be connected with medical malpractice lawyers in your state who may be able to investigate your medical malpractice claim for you and represent your in a medical malpractice case, if appropriate.

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