McKesson 2011 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2011 McKesson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
95
The Alaska Action
On October 12, 2010, an action was filed in Alaska state court by the State of Alaska against the Company and
FDB asserting claims under state unfair and deceptive trade practices statutes, and for fraud and civil conspiracy,
and seeking damages, treble damages, punitive damages, civil penalties, disgorgement of profits, as well as
declaratory relief, interest, attorneys' fees and costs of suit, all in unspecified amounts, State of Alaska v. McKesson
Corporation, et al., (Case No. 3AN-10-11348-CI). The Company filed a motion to dismiss the complaint on
January 10, 2011. A hearing on the Company’s motion to dismiss has not yet been scheduled.
The Wisconsin Qui Tam Action
On October 18, 2010, the Company was informed that a qui tam action was previously filed by four law firms
in Wisconsin state court of Dane County, purportedly on behalf of the State of Wisconsin against the Company
based on essentially the same factual allegations as alleged in In re McKesson Governmental Entities Average
Wholesale Price Litigation, asserting claims under the Wisconsin False Claims for Medical Assistance statute, and
seeking damages, treble damages, civil penalties, as well as attorneys' fees and costs of suit, all in unspecified
amounts, State of Wisconsin ex rel. Hagens Berman Sobol Shapiro LLP, et al. v. McKesson Corporation, (Case No.
10CV3411). On August 26, 2010, the Wisconsin Department of Justice filed a motion to dismiss this qui tam
action, and on December 14, 2010, the court granted the State’s motion. No appeal has been filed.
The Utah Action
On October 20, 2010, an action was filed against the Company in the United States District Court, Northern
District of California, by the State of Utah asserting claims under RICO and for civil conspiracy, tortious
interference with contract, and unjust enrichment, and seeking damages and treble damages, restitution, as well as
injunctive relief, interest, attorneys' fees and costs of suit, all in unspecified amounts, State of Utah v. McKesson
Corporation, et al., (Case No. CV 10-4743-SC). On December 22, 2010, the Company filed a motion to dismiss the
Utah Action, which has not yet been ruled upon.
The Arizona Administrative Proceeding
On November 5, 2010, the Company received a Notice of Proposed Civil Monetary Penalty from the Office of
Inspector General (“OIG”) for the Arizona Health Care Cost Containment System (“AHCCCS”) purporting to
initiate an administrative claim process against the Company, and seeking civil penalties in the amount of $101
million and an assessment in the amount of $112 million for false claims allegedly presented to the Arizona
Medicaid program, (Case No. 2010-1218).
On February 28, 2011, the Company filed a complaint in Arizona Superior Court, County of Maricopa, against
AHCCCS and its Director, alleging that the administrative proceeding commenced by OIG violates the Arizona
Administrative Procedure Act and the Due Process Clauses of the Arizona Constitution and the United States
Constitution, and seeking to enjoin OIG’s administrative proceeding, a declaratory judgment that AHCCCS lacks
jurisdiction and legal authority to impose penalties or assessments against the Company, as well as costs of suit,
McKesson Corporation v. AHCCCS, (Case No. CV-2011-004446). Also on February 28, 2011, the Company filed
an application for an interlocutory order staying, or alternatively dismissing, OIG’s administrative proceeding. On
April 28, 2011, the trial court ruled that AHCCCS has no jurisdiction to impose penalties or assessments against the
Company and enjoined AHCCCS from prosecuting or reinitiating any penalty proceeding against the Company.
The Hawaii Action
On November 10, 2010, an action was filed in Hawaii state court by the State of Hawaii against the Company
and FDB asserting claims under the Hawaii False Claims Act, state unfair and deceptive trade practices statutes,
fraud, and civil conspiracy, and seeking damages, treble damages, punitive damages, civil penalties, disgorgement
of profits, as well as interest, attorneys' fees and costs of suit, all in unspecified amounts, State of Hawaii v.
McKesson Corporation, et al., (Civil No. 10-1-2411-11-GWBC). The Company filed a motion to dismiss the
complaint on January 14, 2011, which was denied by the trial court on April 12, 2011.