McKesson denies fault but will pay $350M

US drug wholesaler McKesson says that it has reached an agreement to settle a law suit - alleging that it has been overcharging consumers and health insurers since 2001 - for $350.0 million.

The combination of the settlement and the decision by the company to establish an estimated $143.0-million reserve for any future average wholesale price-related claims will result in a $493.0-million non-cash charge in the third fiscal quarter ended December 31, 2008, the firm says. McKesson does not believe that this will have any material impact on the company's financial flexibility or business plans.

"As we have consistently stated, we believe the plaintiffs' allegations are without merit, and that McKesson adhered to all applicable laws," said John Hammergren, chief executive of the firm. "Yet, when faced with the inherent uncertainty of this litigation, we determined that entering into the settlement agreement was in the best interest of our shareholders, customers, suppliers and employees," he added.