CVS/Caremark to pay $36.7 million settlement in drug lawsuit.">
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Medicaid Fraud

Harrisburg, PA: (Mar-18-08) The US Attorney's Office and the National Association of Medicaid Fraud Control Units brought charges against CVS/Caremark Corporation, a Rhode Island based pharmacy chain, alleging that the company improperly billed state and federal Medicaid programs. The suit claimed that CVS/Caremark defrauded the federal Medicaid program by switching the form of dosage for ranitidine, the generic form of Zantac, which is a commonly prescribed anti-ulcer medication.

The suit was filed following an investigation that revealed CVS/Caremark switched dosages of ranitidine. It was alleged that between 1999 and 2006, CVS pharmacies allegedly substituted a more-expensive capsule form of the drug, rather than tablets, resulting in higher payments by Medicaid with no medical benefit to patients. In doing so, the company violated numerous state regulations governing the dispensing of drugs.

As part of a multi-state settlement, CVS/Caremark Corporation agreed to pay $36.7 million to resolve allegations. The multi-state settlement requires the company to adopt a "Corporate Integrity Agreement," that will ensure that drug dosages will not be swapped, which would result in higher costs for Medicaid and other prescription programs. The billing practices for CVS will also be subject to ongoing federal scrutiny. The CVS/Caremark agreement settles litigation with multiple states, as well as the federal government. [THE WEEKLY: AG CORBETT ANNOUNCES $36.7M MULTI-STATE SETTLEMENT WITH CVS/CAREMARK]

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Published on Mar-19-08


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