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Originally published August 27 2008

Walgreens Allegedly Defrauded Medicaid by Secretly Switching Drugs to More Expensive Ones

by David Gutierrez, staff writer

(NaturalNews) Walgreen Co., owner of Walgreens Pharmacy, has agreed to pay $35 million to settle a federal lawsuit accusing it of defrauding Medicaid by switching patients onto more expensive drugs.

The federal government sued Walgreens based on the testimony of whistleblower Bernard Lisitza. Lisitza, a pharmacist, accused the company of secretly switching patients to more expensive versions of the heartburn drug ranitidine (the generic form of Zantac), the Parkinson's drug selegiline (a generic version of Eldepryl) and a generic form of the anti-depressant Prozac. By making minor changes, such as giving patients tablets instead of capsules, the company was able to collect more money in Medicaid reimbursements.
These changes were widespread, Lisitza said, and not made for any medical reason.

"Switching between tablets and capsules to deliver medications 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 legal fees," said U.S. Attorney Patrick Fitzgerald.

The violations allegedly took place in 42 states and Puerto Rico, between July 2001 and 2005, and resulted in the public health program paying up to 400 percent more than necessary.

It was the third lawsuit for such an offense that Lisitza had initiated against a pharmacy chain, following lawsuits against private drug store company CVS Caremark Corp. and one against Omincare Inc., which operates nursing home pharmacies.

While stopping short of admitting guilt, Walgreens agreed in the settlement to enter a five-year compliance agreement to make sure that no more medically unnecessary drug switches happen from now on. The agreement will be overseen by the Department of Health and Human Services.

Walgreens will also pay $18.6 million to the U.S. government and $16.4 million to various state Medicaid programs.

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