Healthcare & Pharmaceuticals

Drug-switching

Paying $35 million, Walgreens, a nationwide pharmacy, settled qui tam allegations by a pharmacist whistleblower that it unlawfully defrauded Medicaid by switching prescriptions for ranitidine, the generic form of the brand-name drug Zantac®, and fluoxetine, the generic form of Prozac®. The whistleblower claimed that Walgreens improperly caused its pharmacies to switch Medicaid patients' prescriptions from ranitidine tablets to ranitidine capsules and from fluoxetine capsules to fluoxetine tablets. 

The relator alleged that Walgreens switched drugs because the United States and various individual states had imposed price limits for the amounts that Medicaid would pay for the tablet form of ranitidine, and for the capsule form of fluoxetine.  By substituting a drug dosage form with a Medicaid price ceiling for another form with no ceiling, Walgreens received substantially higher reimbursement amounts from various state Medicaid programs—as much as four times more for ranitidine capsules than for tablets.

For further information visit www.PharmacyFraudSettlement.com.

Kickbacks and nominal pricing

Merck, a pharmaceutical company, agreed to pay more than $400 million to settle charges that it overbilled and defrauded Medicaid for three of its drugs: Zocor, Vioxx, and Pepcid.  In his suit, the whistleblower alleged that for four years, Merck violated the False Claims Act and the Anti-Kickback Statute by fraudulently offering monetary incentives to physicians and hospitals to induce them to switch their patients to Merck’s drugs: Vioxx and Zocor.  He further alleged that among the strategies Merck used to induce doctors to prescribe their drugs were phony ‘research’ studies, bogus ‘training’ sessions, and nominal pricing incentives in which doctors or hospitals were offered huge discounts on drugs if they met certain prescription levels.  Although these discounts often were more than 90% of the Average Manufacturers Price (AMP), Merck did not report these nominal price discounts in its Best Price formulation to the government, and as a result induced Medicaid and state healthcare programs to overpay in reimbursement for Vioxx and Zocor.

For further information visit http://www.DrugFraudSettlement.com.