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Walgreens settles Medicaid fraud allegations

Executive Summary

Walgreens agrees to pay $35 million to the federal government, 42 states and Puerto Rico to settle claims that it had switched the dosage forms of three drugs prescribed to Medicaid patients in order to receive higher reimbursements. The government alleged Walgreens switched patients from the tablet forms of ranitidine (generic Zantac) and Eldepryl (selegiline) to the more expensive capsule forms and switched those prescribed the capsule form of fluoxetine (generic Prozac) to the tablet form. CVS Caremark settled similar drug-switching claims in March and Omnicare did so in 2006 (1"The Pink Sheet," March 24, 2008, In Brief)

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CVS Caremark settles Medicaid charges

CVS Caremark agrees to pay $36.7 million to settle claims by the Justice Department and a number of state attorneys general that it improperly switched patients from the tablet version of ranitidine (generic Zantac) to the more expensive capsules to boost Medicaid reimbursement levels. The payment will go to settle a whistleblower suit filed in 2003 by pharmacist Bernard Lisitza and will be split among the federal government, 23 states and the District of Columbia, and Lisitza, DOJ announces March 18. CVS Caremark also enters into a five-year compliance agreement with HHS to ensure it does not improperly switch drugs in the future. Lisitza initiated a similar but unrelated suit against Omnicare that was settled in November 2006

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