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Drug Giant McKesson|Whacked for $190 Million

NEWARK (CN) - Pharmaceutical wholesaler McKesson Corp. agreed Thursday to pay Uncle Sam more than $190 million to settle claims it overcharged Medicaid for drugs, federal prosecutors said.

San Francisco-based McKesson inflated "average wholesale prices" to First DataBank, which publishes drug prices that most state Medicaid programs use to set payment rates, the Department of Justice said in a statement announcing the settlement. First DataBank then published the inflated prices.

"We have no tolerance for those who take advantage of that system to bring in more business by falsely increasing reimbursements to retailers," U.S. Attorney Paul J. Fishman said in the statement.

In addition to the $190 million to be paid to the federal government, state governments can negotiate separately with McKesson to resolve claims based on their shares of the Medicaid overpayments.

Prosecutors said that federal and state governments have recovered more than $2 billion from drug manufacturers who caused inflated average wholesale drug prices to be published.

McKesson did not admit to any liability.

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