CVS, America's Largest Pharmacy Chain, Pays Nearly $37 Million to Settle Federal and State Generic Drug Switching Charges

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Mar 18, 2008, 01:00 ET from PRforLAW, LLC

    CHICAGO, March 18 /PRNewswire/ -- CVS Corporation, which claims to be
 America's largest pharmacy chain, has paid nearly $37 million to settle the
 nation's first retail pharmacy drug switching case. CVS allegedly charged
 the government up to 400 percent more for Medicaid patients by illegally
 changing generic Zantac(R) prescriptions from tablets to higher priced
 capsules, according to a multi-state complaint pursued by whistleblower
 attorneys Michael I. Behn and Linda Wyetzner.
     The federal Complaint and Settlement Agreement unsealed today in the
 Northern District of Illinois stated that CVS garnered huge profits by
 evading federal and state price ceilings when it unlawfully switched dosage
 forms. Twenty-four states also entered separate settlements with the
 company, Behn and Wyetzner said.
     The generic form of the antacid Zantac, ranitidine, typically comes in
 tablets. Given the drug's popularity, the government set maximum prices
 that Medicaid would pay for tablets, while infrequently prescribed
 ranitidine capsules had no maximum prices. When CVS switched patients'
 prescriptions from ranitidine tablets to the expensive capsules, it cost
 taxpayers up to 400 percent more, according to court documents.
     This CVS case was pursued under federal and state False Claims Acts for
 more than five years by Illinois pharmacist Bernard Lisitza, the relator,
 and his Chicago attorneys, Behn and Wyetzner. "Bernie's your old-fashioned
 corner pharmacist who was alarmed by what he saw happening at CVS," said
 Behn. "It would have been easy for him to look the other way and let CVS's
 switching continue, at taxpayers' expense. Today's result is a vindication
 of a dedicated pharmacist's concern for his patients and all Americans who
 underwrite the costs of Medicaid."
     The CVS case was spearheaded by "tough state prosecutors throughout the
 country," Behn added. "They stand ready, willing and able to take on big
 new cases. Lisa Madigan here in Illinois, Martha Coakley in Massachusetts,
 Marc Dann in Ohio, and other state Attorneys General have made health care
 fraud prosecutions a top priority, and this case is one of the results."
 Patrick Keenan, Deputy Attorney General of Illinois, Robert Patten and
 Peter Clark, Assistant Attorneys General of Massachusetts, and John
 Guthrie, Director of the Ohio Attorney General's Health Care Fraud Unit led
 the multi-state team, along with federal prosecutor Linda Wawzenski in
     The CVS $36.7 million settlement is another in a string of successful
 qui tam whistleblower cases brought by Behn & Wyetzner, Chartered. In 2006,
 Behn represented a pharmacist in a False Claims Act case against Omnicare
 for switching drug dosage forms which resulted in a settlement of more than
 $50 million. In 2005, Behn represented the plaintiffs in the largest
 whistleblower settlement in Illinois and the largest whistleblower
 settlement in Chicago, in which Northrop Grumman paid $134 million to
 resolve claims involving the B-2 "Stealth" bomber. Behn has also
 represented the American Association of Retired Persons ("AARP") before the
 Illinois Supreme Court in upholding the constitutionality of the Illinois
 False Claims Act.
     In executing the Settlement Agreement, CVS denied liability, wrongdoing
 or improper conduct.
     Contact: Michael I. Behn, Esq. 312-629-0000
     United States ex rel. Bernard Lisitza v. CVS Corporation, Northern
 District of Illinois 03C00742C