McKesson to Pay $18 Million to Settle False-Claims Allegations

By Dow Jones Business News, 

By Maria Armental

McKesson Corp. ( MCK ) has agreed to pay $18 million to settle allegations it improperly set temperature monitors used in shipping vaccines under its contract with the Centers for Disease Control and Prevention.

The U.S. Justice Department alleged the San Francisco pharmaceutical distributor failed to set monitors to the appropriate range, from approximately April through November 2007. As a result, it knowingly submitted false claims to the CDC for shipping and handling services, the government alleged.

The monitors, which are a secondary safeguard, are meant detect when air temperature in the shipping box is too far above or below the necessary level.

Under the CDC contract, McKesson provided distribution services, receiving vaccines purchased by the government from manufacturers and then distributing the vaccines to health-care providers.

"Ensuring the integrity and performance of government contracts is paramount, especially when they affect 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 in Atlanta.

A company spokesperson was not immediately available to comment Friday.

The allegations were first raised by Terrell Fox, a former finance director at McKesson Specialty Distribution LLC, under the whistleblower provisions of the False Claims Act, which allow private citizens to file civil actions on behalf of the government and share in any recovery.

Mr. Fox's share of the settlement hasn't been determined, the authorities said.

Write to Maria Armental at

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Referenced Stocks: MCK

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