CHICAGO, June 13, 2008
Walgreens Accused Of Scamming Taxpayers
A Look Inside What's Been Called America's Biggest Pharmacy's Pill-Flipping Scheme
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Play CBS Video Video Walgreens Accused Of Rx Scam Claims have surfaced that reveal nationwide drugstore chain Walgreens allegedly engaged in a scam involving Medicaid, which cheated taxpayers out of millions. Sharyl Attkisson investigates.
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A whistleblower said Walgreens rigged its computers to automatically switch to the most expensive type of pill. In the case of Zantac, that meant switching generic tablets to pricey capsules. (CBS)
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Interactive HealthWatch Explore health issues including AIDS, cancer and antibiotics.
Investigative correspondent Sharyl Attkisson keeps watch on how the government is spending your tax dollars
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“Beyond the reach of cell phones and superhighways, there’s a place called ‘perfect,’” rings the familiar ad for Walgreens.
In a perfect world, however, Walgreens wouldn't be accused of ripping off taxpayers. But we're nowhere near perfect. CBS News investigative correspondent Sharyl Attkisson reports.
Michael Behn, a former federal prosecutor, said, “The pharmacies nationwide had a pill flipping scheme.”
Behn helped expose how Walgreens exploited a Medicaid loophole.
To save taxpayer dollars, Medicaid limits how much it pays for popular forms of drugs.
But it doesn't bother to set price-ceilings on rarely-used versions.
Take generic Zantac, or ranitidine, for example. The antacid is a huge seller in tablet form. Medicaid limits payment to 34 cents apiece.
The same drug as capsules has no price-ceiling because it was so rarely-prescribed. Medicaid pays $1.25 each.
Walgreens figured it could pocket millions by switching patients from tablets to capsules.
Behn explained to Attkisson, “These are the ranitidine capsules.”
“This is what was being prescribed?” Attkisson asked, pointing to the tablets. “And this is what was being given?” pointing to the capsules.
Behn replied, “Correct. At three times or more the cost to taxpayers,” Behn answered.
The scheme was blown wide open by a whistleblower, a pharmacist who doesn’t want to appear on camera. He said Walgreens rigged its computers to automatically switch to the most expensive type of pill.
“The only way in which a computer system could switch from a tablet and a capsule, is if someone went in and manipulated the computer system,” Behn said.
Attkisson asked, “And the fact that this was done nationwide indicates this was a corporate policy?”
Behn responded, “That’s what we alleged.”
By gaming the system, Walgreens managed to change over almost all Medicaid customers from cheap generic Zantac tablets to pricy capsules.
In Florida alone, it cost taxpayers an extra $1.2 million the first year.
And the pill-switching went on for several years nationwide, including other prescriptions: generic Prozac (fluoxetine) for depression, and generic Eldepryl (selegiline) for Parkinson's.
Walgreens denies wrongdoing and declined to be interviewed.
But they recently agreed to pay back the government more than $35 million.
And they're not the only ones. CVS and Omnicare quietly settled similar cases coughing up $86 million more.
The whole pill-flipping episode proves just how imperfect some drugstore chains can be.
© MMVIII, CBS Interactive Inc. All Rights Reserved.
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- First off it is NOT LEGAL for a Pharmacist to just change over a tablet to a capsule with out consulting the provider, even if it is the same medication pharmacy law, not the pharmacy. Maybe CBS should do the research and know what they''re talking about before makes assumptions.
Second if it cost more for the pharmacy don''t you think it would cost more for the patient?
The thing that gets me most about the news is how they always give only half the story. Way to go CBS - Reply to this comment
- "What the news here, this is "business as usual" from the pharmaceutical world. If they get caught, they settle immediately and pay a big fine. No one ever goes to jail, they are immune to crimes because of their deep pockets."
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Along with business as usual in government who takes this opportunity to raise revenue for themselves.
Are you and I, the people that paid the higher cost in copays and probably increased following year insurance costs going to see any money back? No. - Reply to this comment
- It is the greed of the corporations and their political friends who let them get away with it. The needs of the many does not enter here. It is the needs of the few that do, and in this case, it''s money, plan and simple. People are worth $20 million or more and are still looking for ways to screw us hard working decent people.
The entire system of getting meds is a mess. I use ranitidine and get them for $4 bottle at Walmart.
What''s bugging me is that if Walmart can make a deal with the drug companies to sell generics at $4 a pop, why can''t the pharmacies do the same? It is the same pills. How much money is enough? Greed has not bounds. - Reply to this comment
- What the news here, this is "business as usual" from the pharmaceutical world. If they get caught, they settle immediately and pay a big fine. No one ever goes to jail, they are immune to crimes because of their deep pockets.
- Reply to this comment
- Posted by txgrouch2004 at 12:06 AM : Jun 16, 2008
LOL, silly little fairy, my home is paid for, thank you. Because I am well-educated, responsible, and don''t expect my government to give me handouts, I do much better than you ever will. You people! - Reply to this comment
- USAUberAlles taunted
getting to work would cost me around, well, $10/week.
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I see. So your "healthcare" job at Target pays so little that you can''t afford housing. So you actually LIVE at the store, sleeping in a bed hidden in a cardboard box in the back room.
You should get out more. Wal-Mart still has a few "Made in USA" items. Not that I actually BELIEVE that the wokers who made them are all here legally... - Reply to this comment
- "then wnat work DO you do "in healthcare???"
Posted by txgrouch2004 at 10:31 PM : Jun 15, 2008
-And YOUR spelling is atrocious....maybe if you got an education you wouldn''t feel so oppressed that you have no better dignity than to act out against others. No wonder no one will offer you a good job.
Go to school, change your attitude, and perhaps, someday someone will feel sorry enough for you to offer you an opportunity so you won''t spend all your time complaining what the government isn''t giving you. - Reply to this comment
- "The whole pill-flipping episode proves just how imperfect some drugstore chains can be"
Or how incapable of doing their jobs representing "the people" our legislators are, intentional or not. - Reply to this comment
- Posted by txgrouch2004 at 10:31 PM : Jun 15, 2008
LOL! Did I address you? NO! It''s obvious you are jealous. Let me give you a little more to be jealous about, then, since your hunger for arguing, complaining, and playing the victim is so great.
-LOL. I don''t pay for prescriptions because my company does. I don''t pay co-pays, either, and I make much more than enough that $4 gas doesn''t bother me one bit. Routine annual exams, screenings, flu shots? Free.
I hope for you, gas goes up to $10/gallon. With a 6 mile round trip commute to work, and 30mpg (I actually get 31.8, but who is counting, right?), getting to work would cost me around, well, $10/week. - Reply to this comment
- USAUberAlles wrote
I work in healthcare and am horrified to see this type of practice exists.
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BWAHAHA! If you didn''t know about the RAMPANT PRICE GOUGING that is COMMONPLACE in pharmacies - then wnat work DO you do "in healthcare???"
Oh, I get it - you have a minimum wage job STUFFING THE COTTON IN THE BOTTLES at Target... while you spend the day learning to badmouth Wal-Mart, which is A BETTER STORE THAN TARGET HAS EVER BEEN. - Reply to this comment
- I work in healthcare and am horrified to see this type of practice exists. I think the person exposing these frauds has been working for each major chain for a period of time and exposing their schemes.
Good for them for exposing this horrible injustice. - Reply to this comment
- "why do you people always look to the government to do things for you?"
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Who are you calling "YOU PEOPLE???"
Funny, the government always finds a way to interfere with ME when they feel like it. They don''t mind collecting TAXES from me every year. And BTW, that''s WHAT THEY''RE THERE FOR - I know, expecting powerful individuals to DO THEIR JOBS, what was I thinking... - Reply to this comment
- SIXTEEN YEARS OF BABY BOOMERS in the White House has gotten us into this mess.
Enron, Worldcomm, 9/11, record profits for the oil companies while we pay $4/gallon for gas.
NO MORE BABY BOOMERS! I''d like to see Boomers excluded from ANY PUBLIC OFFICE - but the White House is a good place to start. - Reply to this comment
- ERoosevelt08 exclaimed
How many other crooked places are there out there who are cheating the people win the world with such fraud?
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ALL OF THEM.
We live in a fantasy world where the doctor is really there to HELP US and the drug store is there to HELP US and the hospital nurse who can''t find the blood vessel with the needle got her job HONESTLY...
WAKE UP! THEY''RE ALL BANDITS!!! Bandits go where the money is - AND THE BIGGEST MONEY TODAY IS IN HEALTH CARE.
Anyone who has worked in a pharmacy knows what a CROOKED RACKET it is - including the button on the cash register that "bumps up" the price if it looks like the customer has money... - Reply to this comment
- "why do you people always look to the government to do things for you?"
because that is what we created it for, hired people into jobs to do, and why we pay taxes to allow them to do it. why do you people think the government should not do things for you? - Reply to this comment
- Im curious Atty Behn, did you have to show that fraud actually existed through proof of the defendant finding out the fee schedule of payments through each state versus other states, as opposed to a consequential occurance in contractual buying preferences for each pharmacy in the affected states, therefore not fraud, but merely looking as fraud and framed as fraud? What proof of Fraud in price fixing according to services rendered (pills) because they would garner a higher payout.
Posted by soshljustic at 11:37 PM : Jun 14, 2008
Reread the article:
%u201CThis is what was being prescribed?%u201D Attkisson asked, pointing to the tablets. %u201CAnd this is what was being given?%u201D pointing to the capsules.
Behn replied, %u201CCorrect. At three times or more the cost to taxpayers,%u201D Behn answered. - Reply to this comment
- Posted by RowdyWicca at 02:11 PM : Jun 14, 2008
-RowdyWicca, now, are you Chelsea Clinton?
Posted by trishab4
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No, that Wiccan is just naive. - Reply to this comment
- What a disgusting thing to learn about Walgreens. How many other crooked places are there out there who are cheating the people win the world with such fraud?
- Reply to this comment
- This is really NOT NEWS..Corporate Scams are an everyday occurance here in the United States of America Incorporated. It''s their country now folks..till the people decide enough is enough and revolt. It''s up to us..the citizens..to decide what happens is OUR country. However, since the American government is basically run by corporations it will take a Revolution to change it. If Washington, Adams, Franklin, Lincoln, Jefferson and the like were around today...IT would have already begun!
- Reply to this comment
- Especially one Barak Obama who has done his BEST to tear down the efforts of that administration when we had it the BEST we''''ve had in decades!
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Posted by RowdyWicca at 02:11 PM : Jun 14, 2008
-RowdyWicca, now, are you Chelsea Clinton? - Reply to this comment
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