Navigation Links
Hagens Berman Sobol Shapiro: McKesson Settles RICO Lawsuit for $350 Million

SEATTLE, Nov. 21 /PRNewswire/ -- Attorneys representing consumers and third-party payers today announced a proposed landmark $350 million settlement with healthcare services giant McKesson (NYSE: MCK) to settle allegations the company fraudulently inflated the price of more than 400 prescription drugs by manipulating drug-pricing benchmarks.


The lawsuit, filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), claimed McKesson conspired with drug publishing company First DataBank (FDB) to fraudulently inflate the widely used Average Wholesale Price (AWP) figures, which insurance companies, retailers and others use to calculate the purchase price, payments and co-payments of the most common prescription medications.

The settlement is one of the nation's largest RICO settlements, and if approved by the court will be distributed among third-party payers, cash and co-pay consumers.

"The impact of this settlement is very significant for all who have paid for brand name drugs," said Steve Berman, managing partner at Hagens Berman Sobol Shapiro and lead counsel.

Retailers typically purchase drugs based on the wholesale acquisition cost (WAC) and base co-pays and charges to third-party payers using the AWP, court documents show. The suit alleged McKesson and FDB increased the AWP spread between WAC and AWP from 20 to 25 percent beginning in 2001, allowing retail clients to reap larger profits at the expense of consumers and third-party payers, such as insurance companies. By 2004, nearly every common prescription drug enjoyed a 25 percent spread between the two benchmarks.

Plaintiffs claimed McKesson orchestrated the scheme to put the company in good favor with retailers who might otherwise choose to purchase wholesale prescriptions from McKesson's competitors in the highly competitive wholesale arena. Retailers make a profit off the increased spread created by the McKesson engineered scheme.

Court documents state that FDB claimed it surveyed a number of wholesalers when it published its AWP benchmark, when in fact it relied on McKesson as its sole source of information. Beginning in 2001 and through 2003, McKesson changed the mark up on hundreds of brand name drugs from 20 percent to 25 percent as part of the scheme.

"For years consumers have been burdened with inflated drug prices and as a firm we feel a sense of gratitude in being able to ease that burden for many," said Berman. "Today's settlement goes a step further in helping to correct corrupt business practices and rectify a damaging situation to consumers."

Plaintiffs in the case include those who paid for the brand name drugs and whose payments were tied to AWP. This includes all purchases from Aug. 1, 2001 until March 15, 2005. The plaintiffs propose the $350 million disperse among three groups: insurers and other entities that paid for drugs ($288,675,000), consumers who paid a graduated co-payment ($20,900,000), and cash paying consumers ($40,425,000).

A settlement approval hearing has not yet been set.

For more information on this case and to sign up as a consumer or third-party payer you can visit the Hagens Berman Web site at

About Hagens Berman Sobol Shapiro

Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix, San Francisco and New York. Since 1993, it has developed a nationally recognized practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a $300 million settlement in the DRAM memory antitrust litigation, one of the largest anti-trust settlements in history; a $340 million recovery on behalf of Enron employees; over $200 million in proposed settlements in the Average Wholesale Price Litigation; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS served as counsel in a $850 million Washington Public Power Supply settlement and represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit


     Steve Berman (206) 623-7292              Mark Firmani (206) 443-9357
     Hagens Berman Sobol Shapiro              Firmani + Associates Inc.              

SOURCE Hagens Berman Sobol Shapiro
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Hagens Berman Files Class Action Against Bayer Healthcare Over Misleading Marketing Campaign
2. Hagens Berman Sobol Shapiro: Class Action Filed Against Spectranetics
3. Hagens Berman Sobol Shapiro: Attorneys Representing Consumers Prepare for $12 Billion RICO Trial Against McKesson for Alleged Drug Price Manipulation
4. Hagens Berman Appointed Co-Lead Counsel in Case Against Schering-Plough and Merck
5. Gunther von Hagens BODY WORLDS Exhibitions Welcome Specimens From Worlds First Living Body Donor for Plastination
6. Gunther Von Hagens BODY WORLDS Exhibitions Mark 25th Million Visitor Milestone
7. Hagens Berman Sobol Shapiro: Nationwide Class Action Certified in Average Wholesale Price Litigation
8. Hagens Berman: Eleven Defendants Settle in Average Wholesale Price Litigation
9. Anatomist Dr. Gunther von Hagens Clarifies: Plastinates Not For Sale
10. CORRECTED: Hagens Berman Sobol Shapiro Files Suit Against Merck and Schering-Plough
11. Hagens Berman Sobol Shapiro Announces Investigation Into Marketing of Vytorin and Zetia
Post Your Comments:
(Date:11/26/2015)... ... November 26, 2015 , ... Inevitably when people think ... customers choose to buy during the Black Friday and Cyber Monday massage chair ... to search the Internet high and low to find the best massage chair deals, ...
(Date:11/26/2015)... ... 26, 2015 , ... PRMA Plastic Surgery is updating their record books yet ... 6,000th free flap breast reconstruction surgery! , “What an accomplishment for the PRMA team, ... lives and it’s an honor to have served all of these women.” , PRMA ...
(Date:11/25/2015)... , ... November 25, 2015 , ... ... more aggressive than those found on mammography, according to a study published online ... additional cancers not seen on mammography may necessitate a change in treatment. , ...
(Date:11/25/2015)... ... November 25, 2015 , ... TyloHelo Inc , ... accessories. , Sauna accessories help improve the bather experience in the sauna, and ... styles for the purist looking for simplicity in design to accessories that encourage ...
(Date:11/25/2015)... ... November 25, 2015 , ... According to an ... is being more and more widely heralded as a breakthrough for performing hernia repairs. ... has over traditional laparoscopic surgery is that it can greatly reduce the pain that ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... , November 26, 2015 ... of the "2016 Future Horizons and ... Abuse Testing Market: Supplier Shares, Country Segment ... to their offering. --> ... "2016 Future Horizons and Growth Strategies ...
(Date:11/26/2015)... PUNE, India , November 26, ... --> --> ... Research Report" and "Investigation Report on ... 2019 and 2021 forecasts data and ... library. . ...
(Date:11/26/2015)... November 26, 2015 ... addition of the  "2016 Future Horizons ... Cell Surface Marker Testing Market: Supplier ... to their offering.  --> ... of the  "2016 Future Horizons and ...
Breaking Medicine Technology: