As front-line professionals responsible for dispensing medications to Medicaid beneficiaries, pharmacists are particularly well positioned to discover and report Medicaid fraud. As a result, pharmacists have initiated a number of highly successful qui tam actions under the False Claims Act. Time after time, successful qui tam whistleblower actions by pharmacist relators have successfully recovered taxpayer funds.
For example, in a Medicaid fraud case against Walgreens, the pharmacist became a qui tam relator after discovering the drug switching in processing transfers of prescriptions from Walgreens pharmacies. According to his qui tam Complaint, the pharmacist discovered the Medicaid fraud after noting that a Walgreens prescription was for ranitidine capsules rather than tablets, the industry standard. The pharmacist relator stated that Walgreens pharmacists told him that the pharmacy chain had set up its system to fill all ranitidine prescriptions as capsules regardless of what a physician had specifically prescribed.
The same pharmacist relator also successfully pursued a qui tam action against CVS pharmacies for Medicaid fraud arising from drug switching, which resulted in a $37 million settlement.
The initial qui tam case by the relator pharmacist was against his prior employer, Omnicare Inc., the nation’s largest pharmacy for nursing homes. That Medicaid fraud case resulted in a $50 million settlement of False Claims Act allegations.
The Omnicare case was the first to challenge generic drug switching, and served to strengthen Medicaid’s price containment programs for generic drugs. The qui tam relator discovered the conduct which led to this settlement while he was a pharmacist at Omnicare. The pharmacist relator was represented by qui tam attorneys at Behn & Wyetzner, Chartered.
This same pharmacist, after being fired by Omnicare, discovered that similar switching was being done by CVS and Walgreens. Those cases also were investigated and filed on the pharmacist’s behalf by Behn & Wyetzner, Chartered. The CVS case was the first generic drug switching case settlement by a retail pharmacy. CVS paid $37 million to settle claims brought by the United States, 23 states and the District of Columbia.
That pharmacist is also currently pursuing a case against the distributor of the drugs, as he saw the pattern of the switching happening at the various drug stores being caused by the distributor.
The partners of Ven-a-Care of the Florida Keys, a pharmacy, successfully challenged the way in which Medicaid drugs were priced. Ven-a-Care initiated a series of state and federal False Claims Act cases against drug manufacturers for falsely reporting “Average Wholesale Prices” to state Medicaid programs. These cases have recovered hundreds of millions of dollars in taxpayer funds, and ongoing cases stand to recover billions more.
Two veteran pharmacists helped the government recover $84 million through a qui tam action against Merck-Medco Managed Care, L.L.C., a Pharmacy Benefit Manager (“PBM”). This case changed the way in which state and federal governments deal with PBMs. The pharmacists alleged that the PBM had engaged in fraudulent Drug Utilization Reviews, unlawfully cancelled prescriptions, created false records of physician contacts, and used technicians to perform functions that must be done by pharmacists.
Two pharmacists filed separate cases that resulted in a $7 million recovery from Rite Aid under state and federal False Claims Acts. The settlement resolved the pharmacists’ allegations that the company had been:
- failing to delete or readjudicate prescriptions that had been billed to Medicaid but were never picked up;
- restocking items without “lot control;” and
- billing for partially filled prescriptions as if a full prescription had been delivered.
Employees of Interstate Pharmacy Corp./Liliha of Honolulu, Hawaii successfully pursued a Medicaid fraud case that led to a $4 million recovery from the pharmaceutical company, Bergen Brunswig Corp. The employees reported that the company was recycling and reusing pills returned from nursing home facilities in violation of state and federal laws.
A pharmacist’s successful pursuit of a qui tam case requires a high degree of specialized legal expertise. The pharmacist’s qui tam lawyer must be familiar with federal and state False Claims Acts, federal and state Medicaid law and regulations, federal and state Food and Drug Acts, state pharmacist licensure provisions, and state pharmacy regulations. False claims in Pharmacy often involve the intricacies of state pharmacy provider applications and claims procedures, which vary from state to state.
A successful qui tam prosecution also will involve the pharmacist and his qui tam attorney working closely with various state and federal agencies, including the U.S. Department of Justice, U.S. Attorney’s Offices, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration, state Attorneys General offices, state Medicaid Fraud Control Units, state Medicaid agencies, state Boards of Pharmacy, and the National Association of Medicaid Fraud Control Units.
The lawyers at Behn & Wyetzner, Chartered have years of expertise pursuing and settling qui tam cases by pharmacists against pharmacies. They have worked closely with pharmacists, federal and state prosecutors and investigators, and experts, to pursue successful False Claims Act prosecutions and qui tam litigation.