Hagens Berman Secures a $15M Settlement in Case Against McKesson

10/19/2010

SEATTLE - Hagens Berman Sobol Shapiro LLP, a nationwide class-action and complex litigation firm, today announced a $15 million settlement in a case against McKesson Corp. (NYSE: MCK), one of the nation's largest drug wholesalers.

In its role as private counsel for the Office of the Attorney General of Connecticut, Hagens Berman alleged that McKesson artificially inflated drug costs incurred by consumers and state-funded health care programs in Connecticut.

"I'm honored that Hagens Berman could play a pivotal role in helping to return millions of dollars in ill-gotten profits back to Connecticut taxpayers," said Hagens Berman Managing Partner Steve Berman. "McKesson and others conspired to intentionally inflate the price of certain drugs to bring in higher profits, all at the expense of taxpayers."

In the pharmaceutical business, a benchmark known as the average wholesale price is used to determine what federal and state agencies pay for prescription brand-name drugs. The lawsuit alleged that by inflating the average wholesale price, McKesson reaped millions in profits at the expense of Connecticut taxpayers.

The $15 million settlement will be split in the following manner: $9 million is slated to reimburse the state's share of Connecticut's Medicaid program; $3 million will reimburse ConnPace, which provides coverage for senior citizens in Connecticut; $700,000 is earmarked for Connecticut's drug assistance program for AIDS patients; and $2.3 million in civil penalties will go to the state.

The case, State of Connecticut v. McKesson Corporation, was filed in U.S. District Court in Massachusetts on May 28, 2008 as part of consolidated litigation called In re McKesson Government Entities Average Wholesale Price Litigation.

Hagens Berman secured a $350 million settlement from McKesson in a separate class-action lawsuit in November 2008. The lawsuit, first launched in June 2005, also alleged that McKesson fraudulently inflated the price of more than 400 prescription drugs by manipulating drug-pricing benchmarks.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in nine cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List seven times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

Contact
Ashley Klann
ashleyk@hbsslaw.com
206-268-9363


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12/31/06: Case Settled

In late 2006, a settlement was reached with one of the defendants, First DataBank, and in 2008 McKesson agreed to a $350 million settlement for allegedly inflating the price of more than 400 prescription drugs by manipulating drug-pricing benchmarks. Hagens Berman confirmed that more than 315,000 reimbursement checks were distributed by mail to eligible cash-payor consumer class members and “pharmacy” class members.