Mckesson settles drug suit

McKesson Corp. will pay $151 million to 29 states and the District of Columbia to settle a lawsuit alleging the company inflated prices of hundreds of prescription drugs, causing state Medicaid programs to overpay millions of dollars in reimbursements, officials said Friday.

The agreement with San Francisco-based McKesson, one of the country’s largest drug wholesalers, settles allegations the company inflated drug prices by as much as 25% from 2001 to 2009.

An investigation by state and federal agencies found that McKesson overbilled for more than 1,400 brandname drugs from 2001 to 2009. They include commonly prescribed medications such as Adderall, Allegra, Ambien, Celexa, Lipitor, Neurontin, Prevacid, Prozac and Ritalin, officials said.

California will receive about $24 million of the settlement, said state Atty. Gen. Kamala D. Harris. That money will go to the state Medicaid program, not recipients.

McKesson representative Kris Fortner said the claims against the company were without merit, but “given the inherent uncertainty of litigation, we determined that this settlement was in the best interest of our employees, customers, suppliers and shareholders.”

The settlement stems from a 2005 whistle-blower lawsuit that was filed under federal and state false claims statutes. It alleged that McKesson inflated average wholesale prices reported to First Data Bank, which many state Medicaid programs use to set payment rates for pharmaceutical reimbursement.