29 states settle Medicaid drug overpayment case

98 people, including doctors and patients and alleged dealers, were charged in connection with several investigations into prescription drug trafficking on June 6, 2012. iStockphoto

(AP) SAN FRANCISCO - California and 28 other states have reached a $151 million settlement in a lawsuit alleging one of the country's largest drug wholesalers inflated prescription drug prices, costing the states' Medicaid programs millions in overpayments.

California Attorney General Kamala Harris announced the settlement with San Francisco-based McKesson Corp. on Friday. In California, Harris says the overpayments went on from 2001 through 2009.

The other states include New York, New Jersey, Pennsylvania, Colorado and Washington.

The settlement stems from a 2005 whistleblower lawsuit that was filed under federal and states' false claims statutes. The federal government settled its portion of the lawsuit for more than $187 million in April 2012.

McKesson representative Kris Fortner said the claims against the company are without merit and the settlement is "in the best interest of our employees, customers, suppliers and shareholders."

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