Pharmacy chain settles Medicaid fraud claims

Walgreen Co. (“Walgreens”), a national chain of retail pharmacies, has agreed to pay the U.S., 42 states, and Puerto Rico $35 million to settle allegations of Medicaid prescription drug fraud, state and federal officials announced. The settlement resolves claims initiated by a whistleblower who alleged that Walgreens substituted different versions of prescribed drugs solely to increase its reimbursement rate.

From 2001 to 2005, Walgreens allegedly dispensed to Medicaid patients more expensive versions of Ranitidine, Fluoxetine, and Eldepryl than were prescribed. Its pharmacies replaced doses of Fluoxetine, prescribed in capsule form, with more expensive tablets. Ranitidine and Eldepryl, prescribed in tablet form, were replaced with capsules reimbursed at a higher rate.

According to a press release issued by the U.S. Attorney, Northern District of Illinois, “While capsules and tablets generally function in the same way when they enter the body, both federal Food and Drug Administration law and state statutes provide that the different dosage forms of the same compound are not considered the same. Therefore, pharmacists cannot switch customers between capsule and tablet forms of a medication without a direct order from a physician.”

A pharmacist may switch between medications for a Medicaid beneficiary only if the replacement drug: (1) is therapeutically and pharmaceutically equivalent; and (2) costs less than the medication originally prescribed.