Walgreens the third to settle drug-swapping allegations

John O'Brien Jun. 4, 2008, 4:19pm

DEEFIELD, Ill. (Legal Newsline ) - Several state attorneys general have settled their allegations against drug store chain Walgreens, receiving $35 million to resolve charges that the company harmed their respective Medicaid programs.

The agreement, announced Wednesday, puts an end to a five-year lawsuit that featured a joint federal-state investigation. Forty-six states joined in the settlement, while the federal government will receive $18.6 million.

It was alleged that Walgreens switched the prescriptions of Medicaid patients for more expensive drugs from 2001-05, increasing the reimbursement from Medicaid programs.

"This is our third settlement with a company that has engaged in improper drug switching, and it represents the government's continuing commitment to vigorously pursue fraud in government health care programs," said Gregory G. Katsas, Acting Assisting Attorney General for the Civil Division. "The United States will not tolerate pharmacies or any other health care providers that attempt to manipulate the Medicaid program at the taxpayers' expense."

Florida Attorney General Bill McCollum announced that his state would receive $9.8 million but will return all but $3.7 million back to the federal government.

"Florida will not tolerate activities that undermine its Medicaid program and pass increases along to our taxpayers," said Attorney General Bill McCollum.

Only West Virginia, Alaska, Hawaii, the District of Columbia and Vermont did not participate in the settlement.

Bernard Lisitza, a licensed pharmacist, filed the False Claims Act complaint in 2003 and will receive approximately $5 million. He filed two similar suits, both of which have resulted in settlements.

Those settlements, with Omnicare and CVS/Caremark Corp. have totaled more than $120 million.

Walgreens denied any wrongdoing in the settlement.

"Walgreens believes the reimbursements it received from Medicaid were consistent with applicable regulations," the company said in a statement.

From Legal Newsline: Reach John O'Brien via e-mail at john@legalnewsline.com.

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