KHN Morning Briefing

Summaries of health policy coverage from major news organizations

McKesson To Settle Medicaid Billing Lawsuit

The Justice Department says the prescription drug distributor overcharged Medicaid.

MarketWatch: McKesson To Pay $190 Million In Drug-Price Pact
McKesson Corp. will pay $190 million to settle government allegations that the drug distribution giant improperly inflated drug prices that led to overbilling the Medicaid system. The Justice Department had charged the San Francisco-based company inflated the prices reported to the publisher used by Medicaid systems throughout the country to gauge prescription reimbursements (Britt, 4/26).

The Wall Street Journal: McKesson To Settle Drug Markup Claims For $190 Million
The government alleges that McKesson, a drug distributor, reported inflated pricing data on a wide variety of brand-name drugs to First DataBank, a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals. The actions may have violated the False Claims Act, the department said (Rubin, 4/26).

The Associated Press: McKesson Settles Federal False-Claim Allegations
New Jersey U.S. Attorney Paul Fishman and other officials said Thursday that McKesson marked up the average drug prices it reported to publisher First DataBank by 25 percent between 2001 and 2005 (4/26).

Meanwhile, federal prosecutors investigate insider trading allegations -

Los Angeles Times: Insider Trading Inquiry Focuses On Medical Devices Deal
Prosecutors probing insider trading in the medical devices industry are investigating a senior Goldman Sachs banker and a former employee of the notorious hedge fund Galleon Group. The investigation, according to a person briefed on the matter, is focused on the 2009 takeover of Advanced Medical Optics ... The investigation of Abbott Laboratories' takeover of Advanced Medical Optics is part of a broader inquiry of mergers and acquisitions in the medical devices industry (Reckard, 4/27).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.