As if it’s not in trouble enough with states fighting with the federal government to take control of Medicaid, the program for low-income citizens is now also suffering a corporation purposely inflating pricing information for a large number of prescription drugs, according to a press release.
Sadly, this is not the first time for either this company or others doing the very same thing.
But the government is fighting back. McKesson Corporation has agreed to pay the U.S. more than $190 million to resolve claims that it violated the False Claims Act by reporting inflated pricing, causing Medicaid to overpay for those drugs.
The settlement was announced today by Stuart F. Delery, acting assistant attorney general for the Justice Department’s Civil Division; New Jersey U.S. Attorney Paul J. Fishman, and Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.
The government alleges that McKesson, a large drug wholesaler, gave the inflated pricing data to First DataBank (FDB), which publishes drug prices used by most state Medicaid programs to set payment rates for pharmaceuticals.
Another complaint, filed in state court in Lansing, Mich. last year, according to the source, alleged that McKesson entered a secret agreement with Hearst, which publishes the drug pricing data, to inflate prices on some drugs by 5 percent, Bloomberg reported, as written about by Dow Jones.
The state’s Medicaid program paid almost $2 billion on brand-name drugs over eight years and about $80 million on generics, Michigan Attorney General Bill Schuette said, according to Dow Jones.
Medicaid is funded jointly by the federal and state governments. The Justice Department’s settlement puts to rest claims based on the federal share of Medicaid overpayments caused by McKesson’s conduct. In addition to the $190 million – which represents $187 million settlement and interest – state governments including Michigan can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments.
This is not new to federal and state governments, who have recovered more than $2 billion from drug manufacturers that were alleged to have inflated pricing information to FDB and other publishers of drug prices.
Other states are winning, too. Last week, Idaho won $2.6 million from GlaxoSmithKline for overpricing drugs to that state’s Medicaid program. And back in January, units of Actavis Group agreed to pay $118.6 million to the U.S. government and four states to resolve claims that caused overpayment of drugs.
“This is the latest example of a corporation’s intentionally manipulating the complicated system by which drug purchases are reimbursed,” said U.S. Attorney Fishman. “We have no tolerance for those who take advantage of that system to bring in more business by falsely increasing reimbursements to retailers.”
Edited by
Braden Becker
