Supplier to settle Medicaid fraud case for $49.5 million

As reported in the Chicago Tribune

One of the nation's leading suppliers of pharmaceutical services to the elderly has agreed to pay $49.5 million to settle large-scale Medicaid fraud claims, federal officials announced Tuesday.

The fraud claims were contained in lawsuits filed in U.S. District Court in Chicago by the federal government and two whistleblowers who formerly were employees of Omnicare Inc., based in Covington, Ky.

The lawsuits charged that Omnicare gave Medicaid patients Ranitidine capsules instead of less expensive tablets of the same drug; Fluoxetine tablets rather than cheaper Fluoxetine capsules; and two 7.5-milligram Buspirone tablets instead of the less costly single 15-milligram tablets.

Switching the form of the drugs increased the amounts Omnicare charged Medicaid by millions of dollars, officials said.

Ranitidine is generic Zantac, an antacid, and Fluoxetine is generic Prozac, an antidepressant. Buspirone is generic Buspar, an anti-anxiety medication.

U.S. Atty. Patrick J. Fitzgerald announced the settlement, saying that with heavy financial penalties and "the increasing willingness of corporate insiders to report fraud, companies that cheat federal and state governments risk, at a minimum, potentially crippling financial losses."

Omnicare said in a statement that it had "cooperated fully with the review of these matters" and that it was "pleased that the matter has been resolved." It said safety was never an issue in the dispute.

Omnicare, a Fortune 500 company traded on the New York Stock Exchange, said that there had been no finding or admission of wrongdoing and that it had agreed to settle "to avoid expensive and time-consuming litigation."

The $49.5 million settlement amount was to be divided between the federal government and 42 states. Illinois is to receive $2,568,762, according to the U.S. attorney's office.