McKesson Corporation, a pharmaceutical distributor based in San Francisco, will pay $18 million to settle allegations of false claims related to vaccine distribution services under a contract with the Centers for Disease Control and Prevention (CDC).
The company allegedly failed to comply with shipping and handling requirements as part of its contract with the CDC from April 2007 to November 2007. McKesson was supposed to ensure that vaccines were maintained at proper temperatures during shipping, but instead, knowingly submitted false claims to the CDC for services that did not meet its contractual obligations.
“Companies must comply with the requirements they agree to when they contract with the government to provide products that protect the public,” said Assistant Attorney General Stuart F. Delery. “If a contractor does not adhere to the terms it negotiated, its conduct not only hurts taxpayers but also could jeopardize the integrity of products, like vaccines, that Americans count on to be safe.”
The allegations were originally raised in a lawsuit filed by Terrell Fox, a former finance director at McKesson Specialty Distribution LLC, under the qui tam provisions of the False Claims Act. Fox’s share of the settlement has not been determined.
“Ensuring the integrity and performance of government contracts is paramount, especially when they impact programs intended to protect young children,” said Derrick L. Jackson, special agent in charge of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) in Atlanta. “Holding accountable those who fail to meet their obligations – thereby violating the trust of the American taxpayer – continues to be a top OIG priority.”
The settlement marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009. Since January 2009, the Justice Department has recovered over $20.2 billion through False Claims Act cases, with more than $14 billion of that amount recovered in cases involving fraud against federal health care programs.
According to the CDC, redundant measures were used to ensure vaccines were kept at appropriate temperatures during shipping. The most important of these were validated packing procedures used to maintain proper vaccine temperatures. Temperature monitors provided a secondary safeguard.
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Key Facts
- State: Federal
- Category: Drug Trafficking|Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release ↗
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