Attorney General's News Release

June 4, 2008

Nixon obtains $813,000 for taxpayers in Medicaid fraud settlement with Walgreens

Jefferson City, Mo. - Walgreens has agreed to pay $35 million in a settlement with Missouri, 41 other states and the federal government to resolves allegations the national drug store chain improperly billed Medicaid. Attorney General Jay Nixon said Missouri's participation in the settlement means a recovery of $813,719 for taxpayers. The $35 million settlement represents a double damages recovery to the participating states.

Today's settlement is the result of a joint federal-state investigation that arose from a whistleblower complaint in a federal lawsuit filed in 2003. The whistleblower alleged that Walgreens filled prescriptions for numerous Medicaid recipients by switching the dosage forms on three widely used medications.

The company allegedly switched the dosage form of ranitidine, the generic form of Zantac, from tablets to capsules; the dosage form of fluoxetine, the generic form of Prozac, from capsules to tablets; and the dosage from of selegiline, the generic form of Eldepryl (used to treat Parkinson's disease and senile dementia) from tablets to capsules. Each of the switches resulted in higher payments from Medicaid to Walgreens but did not result in any corresponding medical benefits to the patient.

Today's settlement also resolves allegations that Walgreens made these wholesale switches without physician involvement and therefore violated numerous state regulations governing pharmaceutical dispensing.

In addition to the payments to the states and federal government, Walgreens has agreed to the terms of a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services. Those terms will ensure that Walgreens does not switch dosage forms of medications if the result would increase the costs to third-party payers, including Medicaid. The company's billing practices also will be subjected to ongoing federal scrutiny.

The Missouri case was brought by the Medicaid Fraud Control Unit of the Attorney General's Office. Nixon established the unit in 1994. The unit has authority under state law to investigate and prosecute, both civilly and criminally, allegations of fraud against Missouri's Medicaid program.