On April 4, 2018, a lawsuit was unsealed that shows McKesson Corporation – America’s largest drug distributor and one of the top five largest public companies of any kind in America – is being accused of illegally pooling leftover cancer medication from single-dose vials and selling it to healthcare providers. Those healthcare providers then in turn treated patients with it and typically billed the cost to government programs for reimbursement.
The lawsuit, brought by a private company, Omni Healthcare, seeks unspecified damages from McKesson for violating the federal False Claims Act by selling the medication and providing kickbacks by offering the pooled drugs at a discount and repackaging them under non-sterile conditions, from 2001 until at least 2010. The lawsuit was brought under the qui tam provisions and the federal government, thirty states, Washington, D.C., New York City, and Chicago all joined as plaintiffs.
Allegedly, McKesson produced and sold pre-filled syringes containing drugs for cancer and its side effects to oncology centers, hospitals, and physicians. To ensure that each syringe could be properly filled, each vial contained up to ten percent more than would be necessary to fill the syringe. Additionally, since the vials did not contain any preservatives, once the vial was punctured, the medication was out in the open, available to be contaminated. Because of the possibility of contamination, the distributor is supposed to dispose of the partially-used vials.
However, instead of disposing of the partially-used vials, McKesson allegedly “harvested” them, producing roughly one extra syringe per every ten legitimate ones. Further complicating the situation, In some cases, the company put false FDA identification numbers on the unlawfully produced syringes. Some health-care providers billed Medicare and Medicaid for the treatment they gave patients, an action the lawsuit described as defrauding the government.
The lawsuit further contends that McKesson encouraged providers to purchase the pre-filled syringes (using the leftover vials) by offering them at a discount. For example, in September 2007, a syringe cost $327.42, compared to the $346.99 cost of the vials.
McKesson responded in a statement saying, “patient safety, compliance with the law and maintaining the trust of our customers are top priorities for us. While we have not yet formally received the complaint, we reject the allegations as they’ve been reported and plan to vigorously defend the company in court if this case moves forward.”
One of McKesson’s competitors, AmerisourceBergen, pled guilty last year to similar actions and made a payment of roughly $900 million in fines – $625 million in the form of a settlement to resolve FCA allegations and $260 million in fines and forfeitures as part of a criminal suit. Time will tell if the same cards will play out for McKesson.