The Colorado Attorney General’s office
announced Friday that Colorado, 28 other states and the District of Columbia have joined in a $151 million settlement with one of the nation’s largest drug wholesalers.
The settlement is to resolve allegations that the company — McKesson Corp. — inflated prescription drugs by as much as 25 percent, causing the states’ Medicaid programs to overpay millions of dollars in pharmacy reimbursements.
Friday’s settlement combined with a federal settlement with McKesson in April makes the recovery attributable to Colorado’s Medicaid program more than $3.5 million, Attorney General John Suthers said.
Medicaid is jointly funded by the federal government and the state of Colorado.
By reporting inflated pricing data for a large number of prescription drugs, Suthers said McKesson caused the state’s Medicaid program to overpay for those drugs.
Friday’s state settlement revolves around allegations that McKesson deliberately inflated the Average Wholesale Prices (AWP) it reported. AWP is the benchmark used by most states, including Colorado, to set pharmacy reimbursement rates for pharmaceuticals dispensed to Colorado Medicaid beneficiaries.
Colorado and the other states alleged that McKesson deliberately inflated AWP prices it reported to First Data Bank, a publisher of drug prices, thereby inflating many AWPs used by Colorado to set reimbursement.
In April, the federal government settled the federal portion of the lawsuit for more than $187 million.
The settlement money will go directly to the state’s Medicaid program and is to be paid with interest by July 30.
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or
