Walgreens Co. has agreed to pay $35 million to settle a federal whistleblower lawsuit alleging it boosted the price for prescriptions paid by Medicaid by switching from capsules to tablets, or vice versa, depending on which was most expensive. According to federal officials, the practice of switching dramatically increased the amount of taxpayer money that Walgreens, which operates drug stores in 48 states and Puerto Rico, charged to the Medicaid program. The federal government, 42 states and Puerto Rico will share the $35 million. Of the states that are included, Alabama will receive $193,018, which will go to the state Medicaid program to settle the allegations of improper billing. This is just another example of corporations that participate in the Medicaid program cheating the government, hoping they won’t get caught and then settling their wrong-doing.

This was the third settlement by a major pharmacy chain resulting from the whistleblower suits, joined in by the federal government, that alleged switching of tablets and capsules. In March of this year, CVS Caremark Corp. agreed pay $36.7 million and Omnicare Inc. settled for $49.5 million in November 2006. Daniel R. Levinson, inspector general of the U.S. Department of Health and Human Services, made this statement:

Let this serve as a reminder of our priority to investigate and prevent illegal schemes that abuse Medicaid programs at the expense of taxpayers and vulnerable recipients.

The settlement in the Walgreens case covers allegations that for three drugs–Ranitidine (generic Zantac), Fluoxetine (generic Prozac) and Eldepryl or Selegiline (generic Eldepryal)–Walgreens switched Medicaid patients from a cheaper version to a more expensive version to boost its reimbursements from the Medicaid program. For example, Medicaid patients who had prescriptions for 150- or 300-milligram tablets of Ranitidine were switched to more expensive capsules. Those with prescriptions for 10 mg or 20 mg capsules of Fluoxetine were switched to more expensive tablets. Also, prescriptions for 5 mg tablets of Eldepryl were switched to more expensive capsules. Pharmacists are allowed to make such switches only if the form of the compound they are switching to is therapeutically equivalent and costs less than the one specified in the prescription.

Source: Associated Press

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