State of Oregon Hires Hagens Berman in Medicare Fraud Lawsuit against McKesson

The state of Oregon has chosen Hagens Berman to represent it in a lawsuit alleging that McKesson Corporation (NYSE: MCK) defrauded the state by artificially inflating the price of more than 400 brand-name prescription drugs, the sixth state to hire the firm on this issue.

The firm is also representing the states of Virginia, Utah, Montana, Mississippi and Connecticut in similar cases alleging that McKesson defrauded those states' Medicaid programs.

The firm has also filed a class-action lawsuit on behalf of municipalities across the United States. A class in that case was certified by a federal court on March 4, 2011.

The complaint on behalf of Oregon was on filed Nov. 7, 2011, in the United States District Court for the Northern District of California. The lawsuit alleges that several of McKesson's executives constructed a scheme to mark up the average wholesale price (AWP) of many prescription drugs.

McKesson raised the spread between the published AWP and the actual acquisition costs in an effort to increase profits, the lawsuit claims.

Those prices were passed along, according to the lawsuit, to Oregon's Medicaid program. The complaint alleges that McKesson's activities represent a violation of federal racketeering, or RICO laws, and thus damages are subject to automatic trebling.

A case brought by consumers and third-party payors has already been settled. In that case, U.S. District Court Judge Patti B. Saris cited internal documents where McKesson boasted that by the end of 2004, nearly "99%" of all brand-name drugs were set at a higher price as a result of the scheme.

That case settled in 2008 for $350 million, and the settlement was given final approval by Judge Saris on August 3, 2009.


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 Follow the firm for updates and news at @ClassActionLaw.

Ashley Klann
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