State Wins $64 Million in Medicaid Fraud Settlement

NEW YORK—New York state will receive $64 million from McKesson Corporation after the drug distribution company allegedly inflated pricing information for more than 1,400 brand name prescription medications. It overcharged Medicaid in states across the country, including New York.

The settlement resolves charges that McKesson violated the New York State False Claims Act and the Federal False Claims Act, after the company reported inflated pricing for hundreds of types of drugs, including Adderall, a common treatment for ADHD; Ambien, a relaxant; and Lipitor, which is used to combat high cholesterol. The company sent its drug pricing data to an agency that dictates payment for “pharmaceutical reimbursement” for Medicaid, according to a news release from Attorney General Eric T. Schneiderman.

“Pharmaceutical distribution companies are not above the law. This settlement holds McKesson accountable for attempting to make millions of dollars in illegal profits,” said Schneiderman in the release.

McKesson’s restitution payment to New York is part of a $151 million multistate settlement.

The investigation was coordinated nationally. Friday’s agreement with New York and 29 other states follows a federal settlement in April.

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