Kris Fortner, director of corporate public relations for McKesson, said the company continues to believe that the allegations related to average wholesale prices are without merit, and that company officials did not manipulate drug prices or violate any laws.
“However, when we weighed our conviction that we did not violate any laws against the inherent uncertainty of litigation, we determined that this settlement was in the best interest of our employees, customers, suppliers and shareholders,” Fortner said in an e-mailed statement.
The settlement covers mark-up percentages related to a wide variety of brand-name drugs that were allegedly inflated, according to the release.
The U.S. Justice Department said state officials are free to separately negotiate resolutions with McKesson pertaining to alleged losses for the states' portion of drug costs in the government health insurance program for the poor.
In a Jan. 30 filing with the Securities and Exchange Commission, the publicly traded McKesson reported that it had reached a $173 million “agreement in principle” to settle average wholesale price allegations from state attorneys general.
McKesson said it's not clear how many states will accept shares of that settlement, and it will continue to defend against litigation from nonsettling states.
Government investigators have been examining manipulation of average wholesale drug prices for some time. According to the Justice Department, more than $2 billion has been recovered from drug manufacturers accused of reporting inflated prices to First Databank.
"Our analyses of drug price reporting practices—including the use of 'average wholesale price'—have consistently identified excessive Medicare and Medicaid payments resulting from these practices," HHS Inspector General Daniel Levinson said in a written statement.
In 2008, McKesson agreed to pay $350 million to settle a class-action lawsuit from the New England Carpenters Health Benefits Fund that alleged a racketeering conspiracy between McKesson and First Databank involving the reporting of inflated drug prices.
McKesson rejected the allegations in that case, saying company officials denied each of the claims in the lawsuit and insisting that the company broke no laws. An antitrust lawsuit based on the same allegations was also dismissed in 2008.