McKesson settles seven year lawsuit.

McKesson Corporation will pay $151 million to 29 states to settle a lawsuit claiming the company inflated the prices of prescription drugs. The settlement marks then end to a seven year legal battle that started back in 2005 when a whistle blower claimed the company wasn’t billing Medicare accurately.

The lawsuit details

The suit claims McKesson, one of the largest drug wholesalers in the U.S., bumped up prices on medications as much as 25 percent from 2001 to 2009. An investigation shows McKesson was overbilling state Medicare programs for 1,400 brand-named drugs. The drugs included common medications like Adderall, Allegra, Ambien, Celexa, Lipitor, Neurontin, Prevacid, Prozac and Ritalin.

Paying the money back

California stands to get $24 million back from the company. Attorney General Kamala Harris says the state needs every dollar of its Medicare fund to be spent wisely. “In these difficult budget times, it is crucial that California’s scarce public resources support the urgent needs of our state,” Harris said in a statement. “We cannot allow dollars meant for patients to be diverted to inflate corporate profits.”

McKesson says claims are untrue

Despite the findings of a third party audit, the San Francisco based company says it did not break any laws. McKesson representative Kris Fortner said the claims against the company are without merit, but “given the inherent uncertainty of litigation, we determined that this settlement was in the best interest of our employees, customers, suppliers and shareholders.”

“We did not manipulate drug prices and did not violate any laws,” Fortner said.

McKesson says the inflation claims are untrue.

The lawsuit started to unfold in 2005 when a whistleblower came forward alleging the company was altering drug prices. Federal and state government’s got involved and the lawsuit has finally wrapped up this summer.