Connecticut Attorney General files lawsuit against McKesson over alleged inflation of prescription drug prices

May 30 2008

Connecticut Attorney General Richard Blumenthal (D) on Thursday filed a lawsuit in U.S. District Court in Boston over allegations that prescription drug distributor McKesson conspired to inflate the average wholesale prices of hundreds of brand-name medications in violation of federal racketeering and state consumer protection laws, the AP/Hartford Courant reports.

According to the lawsuit, McKesson conspired with First DataBank and other companies that publish prescription drug prices to increase, fix and maintain AWPs for 400 brand-name medications at 25% more than wholesale acquisition costs, compared with a previous premium of 20%.

Blumenthal said that, because state and federal health care programs base reimbursement rates for prescription drugs on AWPs, physicians, pharmacies and other health care providers that prescribed or dispensed medications distributed by McKesson could increase their profits. He added that state health care programs and residents overpaid by millions of dollars for prescription drugs because of the "illegal and deceptive practices" used by McKesson. Blumenthal said, "The victims of this surreptitious scheme included the patients and taxpayers who were overcharged by companies seeking higher sales and profits," adding, "McKesson exploited publicly funded programs that serve our most vulnerable citizens."

McKesson officials have not reviewed the lawsuit, according to an e-mail from company spokesperson James Larkin. In addition, he wrote that McKesson does not set AWPs or retail prices for prescription drugs paid by health plans or consumers. McKesson has denied similar allegations in other lawsuits, the AP/Courant reports (Collins, AP/Hartford Courant, 5/29).