Attorney General Dustin McDaniel announced Friday (July 27) that Arkansas and other states have reached an agreement with the McKesson Corporation to settle allegations that McKesson reported inflated pricing data for prescription drugs and caused state Medicaid programs to overpay for those drugs.
The settlement will cost McKesson $151 million, according to Bloomberg News.
Thirty states and the federal government filed suit against McKesson in U.S. District Court in New Jersey. The federal government reached a settlement with McKesson in April for $187 million.
Arkansas’s Medicaid program will receive $1,052,510.28 in the settlement. With federal matching funds added, approximately $4.3 million will go to Arkansas Medicaid.
“Arkansans should not have to foot the bill for companies that artificially increase drug prices and raise Medicaid reimbursement rates,” McDaniel said in a statement. “This case shows our commitment to ensuring that our Medicaid dollars are being spent properly.”
The pricing data at issue in the settlement concerns the Average Wholesale Price benchmark used by the Arkansas Medicaid program to set pharmacy reimbursement rates for drugs dispensed to Medicaid beneficiaries. The states alleged that McKesson, one of the largest drug wholesalers in the United States, reported inflated Average Wholesale Pricing data to First Data Bank, a drug-pricing publisher, thereby inflating the prices used for reimbursement.