CVS Pharmacy violated False Claims Act, costing states hundreds of millions of dolloars, lawsuit claims

Friday, April 18, 2014 by: PF Louis
Tags: CVS Pharmacy, False Claims Act, fraud

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(NaturalNews) The real drug problems are FDA-approved. Not only do they not cure and only sometimes relieve symptoms, but they also cause side effects that create more medical problems. Many drugs are overcharged to public insurers such as Medicare, Medicaid and others. That motivates federal and state governments to go after the money through lawsuits with the help of whistleblowers. And the law that covers such claims is known as the False Claims Act.

The False Claims Act is sometimes called the "Lincoln Law" because it was written into federal law upon discovery of various companies cheating the Union with pumped-up charges for clothing and war toys during the Civil War. It featured provisions that enabled private citizens to report private enterprise fraud against government agencies.

Those provisions are called qui tam provisions, short for a Latin phrase, qui tam pro domino rege quam pro se ipso in hac parte sequitur, which roughly translates to "he who brings an action for the king as well as for himself."

"For himself (or herself)" means that the whistleblower -- in legalese, the relator -- is entitled to a piece of the action, 15 to 30 percent, while the government gets the larger cut. During the Civil War, the relator was entitled to 50 percent.

So if you work for a large corporation that relies largely on charging government agencies for services or products and have access to sufficient records, here's an opportunity to get even with your employer and give yourself a retirement bonus as a whistleblowing relator.

Then comes CVS Pharmacy under False Claims Act scrutiny

This suit alleges that CVS Pharmacy was involved with charging Medicare for DEA (Drug Enforcement Agency) Schedule 2 and 3 drugs, considered controlled substances, without DEA registration numbers. Examples are oxycodone, codeine and other prescription-only pain killers or psychotropics.

Properly prescribed controlled substances require DEA registration numbers on prescriptions. But according to the suit, filed originally by Fox Rx as the relator, one out of every five of CVS's payment claims to Medicaid during the period of 2008 - 2010 were without DEA-required registration numbers.

Fox Rx is a private enterprise insurance provider, and their lawsuit has attracted the United States, New York City, Washington, DC, and Chicago. After it was recently unsealed, 18 states were added as plaintiffs.

Fox claims, "CVS Pharmacy's failure to include DEA numbers was not mere error - it was a profitable business practice." The 36-page complaint also added this stinger: "As a result of its practices, CVS allowed federal and state funds to fund the purchase of dangerous drugs for black market sale and abuse."

Fox is demanding payment to the government three times what was lost from fraudulent payments, which could total hundreds of millions of dollars. And they want up to $11,000 per fraudulent prescription.

Saying CVS is going through some choppy financial water is an understatement. In 2013, they settled two lawsuits with similar charges to this one, paying out $11 million and $4.25 million. Now CVS has become a "usual suspect".

Fox Rx has another target in the legal system, the Walgreen Company. This recently filed suit accuses Walgreens of prescription drug payment fraud with both private and government insurance programs.

The Fox group alleges that Walgreens was not complying with state laws regarding substituting generic drugs. And Fox Rx also claims that Walgreens dispensed expired drugs too. Fox claims that these activities together have lead to Walgreens overcharging Medicaid, Medicare Part D and one of Fox Rx's private subsidiary insurance providers.

Seems like there are a few kinks in Big Pharma's drug pipeline. Maybe that's a good thing.

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