CVS Caremark Corp., to settle claims, Ohio to recover $1.6 million

CVS Caremark Corp., one of the nation's largest pharmacy chains, has agreed to pay nearly $37 million to the federal government, 22 states and the District of Columbia to settle claims that it fraudulently billed Medicaid for a more expensive form of a drug used to treat ulcers and heartburn. The settlement announced Tuesday resolves a whistleblower lawsuit filed five years ago by a pharmacist. CVS allegedly gave Medicaid patients capsules of Ranitidine instead of less expensive tablets of the drug, whose generic version is Zantac. This allowed the Rhode Island-based pharmacy chain to increase profits by charging a higher reimbursement rate for Medicaid claims made between 2000 and 2006, according to the U.S. attorney's office. Drugs generally work the same in capsule and tablet form, but it is illegal for pharmacists to substitute one for the other without permission from a doctor. In the suit, the governments claimed that the company violated state and federal laws and rules by changing dosage forms of an antacid medication. The alleged changes forced the government to pay the pharmacy significantly more for the drug that they would have otherwise paid.

CVS denied wrongdoing but agreed to settle. 

Ohio will recover more than $1.6 million from CVS/Caremark to settle the claim that the pharmacy company improperly billed Ohio’s Medicaid program, according to Attorney General Marc Dann’s office. The payment represents Ohio’s share of a $36.7 million settlement as noted above.