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McKesson Settles Whistleblower Lawsuit for $18 Million

August 22, 2014 — Informants help our government fight fraud by government contractors who engage in False Claims Act violations. By filing a whistleblower lawsuit on the government’s behalf, conscientious tipsters help to apprehend unscrupulous federal contractors. To reward insiders willing to come forward, the qui tam provisions of the statute allow whistleblowers to keep a share of the government’s recovery.

Government Contractor Resolves False Claims Act Allegations Concerning Improper Shipping of Vaccines Under Contract with CDC

McKesson Corporation will pay $18 million to settle False Claims Act allegations that it improperly set temperature monitors used in shipping vaccines under its contract with the Centers for Disease Control and Prevention (CDC). The allegations first came to light in a whistleblower lawsuit filed by Terrell Fox, who formerly worked as a finance director with McKesson Specialty Distribution LLC. Fox’s share of the settlement with the Justice Department has not been decided.
McKesson, based in San Francisco, California, distributes pharmaceutical products, including vaccines. If vaccines are not maintained at certain temperatures during shipping, their effectiveness may be compromised. To avoid that outcome, the CDC requires by contract that its shipping contractors use redundant measures to make sure temperatures during transport are properly regulated. The first line of defense is to use validated packing procedures. As a backup measure, government contractors must use temperature monitors.
Under its contract with the CDC, McKesson received vaccines that the government had purchased and distributed them to health care providers. McKesson was required to use electronic temperature monitors that could sense when the air temperature in the containers hit two degrees Celsius and cooler or eight degrees Celsius and warmer. From April to November 2007, in breach of the contract, McKesson chose not to set the monitors properly, thus providing insufficient assurance that the vaccine shipments had not been compromised by becoming too hot or cold. By submitting claims for payment to the CDC when it knew that its shipping services had not conformed to the terms of its contract, McKesson filed false claims to the government in violation of the False Claims Act.

False Claims Act Lawsuits Target Abuse By Government Contractors

While Waters & Kraus is not handling this particular case, we are representing whistleblowers in similar False Claims Act lawsuits. If you have similar claims against a different government contractor, email us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs. George Tankard and Anne Izzo, qui tam lawyers in Waters & Kraus’ Maryland office, protect tipsters throughout the whistleblower lawsuit process.

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