KMART resolves drug manufacturer coupon, gas discount allegations

By Amanda Rupp | Sep 9, 2015

KMART Corp, a discount department store chain that runs approximately 780 in-store pharmacies in the United States U.S. Virgin Islands and Puerto Rico, recently paid the U.S. to resolve allegations about drug manufacturer coupons and gas discounts.

The payment, which amounts to $1.4 million, addressed accusation that the company violated the False Claims Act with improper Medicare beneficiary inducements. These inducements were made through gas discounts and drug manufacturer coupons.

The allegations were that between June 2011 and June 2014, the company knowingly and wrongly influenced Medicare beneficiaries to take their prescriptions to pharmacies within Kmart in order to avoid paying or to reduce payments of prescription co-pays. These co-pays would otherwise be required of the beneficiaries.

Federal law does not allow beneficiaries of specific health programs to influence people’s choices of their providers.

The lawsuit was filed by Joshua Leigh, a former pharmacist at Kmart. He will gain approximately $248,500 from the settlement sum.

“The United States will continue to pursue retail pharmacies that improperly attempt to influence a beneficiary’s choice of pharmacy,” said principal deputy assistant attorney general Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The government will not permit pharmacies to use improper business tactics to solicit business that does nothing to improve the quality of health care received by Medicare beneficiaries and increases the costs of the Medicare program.”

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