Walgreens Settles Medicaid Fraud Allegations

Company will pay $35 million to settle claims it improperly switched forms of drugs.


Pharmacy retailer Walgreens has agreed to fork over $35 million to settle allegations that it squeezed the government out of additional reimbursements by improperly switching the type of drugs given to Medicaid patients, the Justice Department said in a press release this week.

Walgreens did not admit guilt in the settlement, a company spokeswoman said.

From the press release:

Walgreens, which operates over 5,000 retail pharmacies throughout the U.S., switched the prescriptions for Medicaid patients who were prescribed 150 mg or 300 mg tablets of Ranitidine to more expensive capsules; prescriptions for 10 mg or 20 mg capsules of Fluoxetine to more expensive tablets; and prescriptions for 5 mg tablets of Eldepryl to more expensive capsules. By switching the form of the drug dispensed to Medicaid patients, Walgreens substantially increased its reimbursement from Medicaid while providing no additional medical benefit to patients.

"Switching medication from tablets to capsules might seem harmless, but when that is done solely to increase profit and in violation of federal and state regulations that are designed to protect patients, pharmacies must know that they are subjecting themselves to the possibility of triple damages, civil penalties, and attorney fees," Patrick Fitzgerald, a U.S. attorney for the Northern District of Illinois—whom you might remember from the Valerie Plame leak controversy—said in the press release. "These penalties, coupled with the willingness of insiders to report fraud, should deter such misconduct, but when it doesn't, the result in this case and others serves notice that we will aggressively pursue all available legal remedies."

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