When Natividad Medical Center decided in 2002 to outsource its pharmacy management to a $120 billion company, hospital officials expected to gain leading industry expertise. 


But according a lawsuit filed March 1 in Monterey County Superior Court, San Francisco-based McKesson Corporation’s pharmacy managers failed to comply with federal regulations on discounted drugs, and kept shoddy patient records, too. 


When hospital management discovered irregularities under the U.S. Health Resources and Services Administration’s rules on drug discounts for poor patients, Natividad terminated the $375,000-a-year contract and took the pharmacy back in-house. 


Deputy County Counsel William Litt estimates McKesson may have shorted the county $1 million in available drug discounts, and given reduced-price drugs to patients who didn’t qualify. 


Now, hospital officials are struggling to wade through indecipherable records. 


“We need McKesson’s assistance to reconstruct what happened,” Litt says. 


The erroneous pricing affected only Natividad’s bottom line, Litt adds, and the cost wasn’t passed on to patients. 


But it could have jeopardized the hospital’s eligibility to receive federally discounted drugs, he adds. 


McKesson representatives declined to comment.